GIFT .  or 


1 


TENNESSEE  l 


Ux"?. 


INSURANCE  LAWS 


IN  FORCE 
JULY    I,   l^OT 


REAU    E.   FOLK 

INSURANCE  COMMISSIONER 


NASHVILLE. 

rOLK-KEBLIN    PTS.   CO. 

1907 


H& 


^"■ 


C^> 


Insubiance   Department. 
Nashville,   Tennessee. 
This  compilation  includes  all  laws  relating  to  insurance 
and  insurance  companies  of  all  kinds  upon  the  statute  books 
of  the  State  of  Tennessee  at  this  date  (July  i,  1907). 

Wherever  italicized  words  are  used  in  the  body  of  the 
text,  they  are  followed  by  the  chapter  and  Acts  from  which 
they  are  taken. 

The  next  regular  session  of  the  Legislature  will  begin 
the  first  Monday  in  January,  1909. 

Reau  E,  Folk, 
Insurance  Commissioner. 
July  I,  1907. 


329277 


GENERAL  INSURANCE  ACT. 


LIFE,  FIRE  AND  CASUALTY  INSURANCE  ON  LEGAL 
RESERVE   BASIS. 


CHAPTER  i6o,  ACTS  OF  1895. 

AN  ACT  to  govern  and  regulate  the  business  of  insurance,  other 
than  life  and  casualty  insurance  upon  the  assessment  plan,  and 
to  repeal  all  laws  or  parts  of  laws  in  conflict  with  this  Act. 

Section  r.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  this  Act  may  be  cited  as  the 
Tennessee  Insurance  Act  of  1895.  When  consistent  with 
the  context,  and  not  obviously  used  in  a  different  sense, 
the  term  "company"  or  "insurance  company,"  as  herein 
used,  includes  all  corporations,  associations,  partnerships, 
or  individuals  engaged  as  principals  in  the  business  of 
insurance.  The  word  "domestic"  designates  those  com- 
panies incorporated  or  formed  in  this  State,  and  the  word 
"foreign,"  when  used  without  limitation,  includes  all  those 
formed  by  authority  of  any  other  State  or  government. 
The  terms  "unearned  premiums"  and  "reinsurance  re- 
serve," and  "net  value  of  policies"  or  "premium  reserve," 
severally  intend  the  liability  of  an  insurance  company  upon 
its  insurance  contracts,  other  than  accrued  claims,  computed 
by  rules  of  valuation  established  by  Section  8.  By  the 
term  "net  assets"  is  meant  the  funds  of  an  insurance  com- 
pany available  for  the  payment  of  its  obligations  in  Tennes- 
see, including  uncollected  and  deferred  premiums  not  more 
than  three  months  due  on  policies  actually  in  force,  after  de- 
ducting from  such  funds  all  unpaid  losses  and  claims,  and 
claims  for  losses,  and  all  other  debts  and  liabilities,  inclu- 
sive of  policy  liability  and  exclusive  of  capital. 

Sec.  2.  Be  it  further  enacted,  That  a  contract  of  insur- 
ance is  an  agreement  by  which  one  party,  for  a  considera- 
tion, promises  to  pay  money  or  its  equivalent,  or  to  do  some 
act  of  value  to  the  assured  upon  the  destruction,  injury, 
loss  or  damage  [Chapter  31,  z\cts  of  1899]  of  something 
in  which  the  other  party  has  an  insurable  interest,  and  it 


-6— 


shall  be  unlawful  for  any  company  to  make  any  contract  of 
insurance  upon  or  concerning  any  property  or  interests  or 
lives  in  this  State,  or  with  any  resident  thereof,  or  for  any 
person,  as  insurance  agent  or  insurance  broker,  to  make, 
negotiate,  solicit,  or  in  any  manner  aid  in  the  transaction 
of  such  insurance,  unless  and  except  authorized  under  the 
provisions  of  this  Act ;  Provided,  That  nothing  contained  in 
this  Act  shall  affect  the  rights  and  powers  of  corporations 
engaged  in  the  transaction  of  life  and  casualty  insurance 
upon  the  assessment  plan. 

This  Act  is  hereby  amended  so  as  to  include  within  its 
promsions  life  insurance  as  tvell  as  fire  insurance,  provided 
that  the  provisions  of  this  amendment  shall  apply  only  to 
counties  having  a  population  of  not  less  than  24,930,  and 
not  more  than  24,950,  according  to  the  Federal  Census  of 
1900,  or  any  subsequent  Federal  Census  [Chapter  423,  Acts 
of  1903]. 

Skc.  3.  Be  it  further  enacted,  That  the  department  of  in- 
surance shall  remain  as  now  established.  There  is  hereby 
established  a  bureau,  in  connection  with  the  office  of  Treas- 
urer, and  to  be  designated  the  "Bureau  of  Insurance,"  which 
shall  be  charged  with  the  enforcement  of  the  laws  hereto- 
fore, or  zi'hich  may  be  hereafter,  passed  relating  to  insur- 
ance. [Section  i,  Chapter  58,  Acts  of  1873.]  Its  Chief 
officer  shall  be  Treasurer  of  the  State,  who  shall  be  styled 
the  Insurance  Commissioner,  ex  officio.  The  Insurance 
Commissioner  shall  exercise  the  powers  and  perform  the 
duties  conferred  and  imposed  upon  him  by  this  Act,  or  by 
any  other  law  of  the  State. 

The  Insurance  Commissioner  may  appoint  a  Deputy  In- 
surance Commissioner  to  assist  him  in  the  discharge  and 
performance  of  his  duties,  and  in  the  event  of  a  vacancy  in 
the  office  of  the  Insurance  Commissioner,  or  in  his  absence 
or  disability  for  any  reason,  the  said  Deputy  is  hereby  au- 
thorised and  directed  to  perform  all  the  duties  required  of 
the  Insurance  Commissioner.  The  said  Deputy  shall  exe- 
cute bond  with  proper  surety  in  the  sum  of  five  thousand 
dollars,  said  bond  to  be  approved  by  the  Insurance  Commis- 


— 7— 

sioner,  conditioned  upon  the  faithful  performance  of  his 
duties,  and  said  Deputy  shall  be  removable  at  the  pleasure 
of  said  Insurance  Commissioner.  [Chapter  459,  Acts  of 
1907.] 

The  records  of  the  said  Insurance  Bureau  shall;  at  all 
times,  be  open  to  the  inspection  of  the  public,  subject  to  such 
rules  as  may  be  made  by  the  Commissioner  for  the  safe- 
keeping; free  from  any  charge  ivhatever;  and  he  shall,  on 
demand,  furnish  certified  copies  of  any  paper,  report  or  doc- 
ument on  file  in  his  office  to  any  person  requesting  the  same, 
upon  payment  of  the  fee  allowed  by  law. 

The  Commissioner,  with  the  approval  of  the  Governor, 
shall  devise  a  seal,  with  suitable  inscription,  for  the  Bureau 
of  Insurance,  a  description  'of  which,  zvith  a  certificate  of 
approval  by  the  Governor,  together  zuith  an  impression 
thereof,  shall  be  filed  in  the  office  of  the  Secretary  of  State; 
which  seal  shall  thereupon  be  and  become  the  seal  of  the 
Insurance  Bureau,  and  the  same  may  be  renczved  whenezrr 
necessary. 

Every  certificate,  assignment  of  conveyance  executed  by 
the  Commissioner,  relating  to  the  business  of  insurance 
companies,  in  pursuance  of  authority  conferred  by  lazv,  and 
sealed  zvith  said  seal  of  office,  shall  be  recorded  in  the  proper 
recording  office  in  the  same  manner,  and  zvith  the  same 
effect  as  a  deed  regtdarly  acknozvledged  or  proved  before  an 
officer  authorised  by  lazv  to  take  the  proof  or  acknozvlcdg- 
ment  of  deeds,  and  all  copies  of  papers,  in  the  office  of  said 
Bureau,  certified  by  the  Insurance  Commissioner,  and  au- 
thenticated by  the  said  seal,  shall,  in  all  cases,  be  evidence 
equally  and  in  like  manner  with  the  original. 

If  the  Insurance  Commissioner  shall  exact  or  receive, 
either  directly  or  indirectly,  any  sum  of  money,  from  any 
insurance  company  doing  business  in  this  State,  other  than 
the  fees  allozved  by  lazv;  or  shall  zvilfully  issue  a  fraudulent 
or  false  certificate  of  soundness  to  any  insurance  company; 
or  shall  directly  or  indirectly  receive  any  money  or  other 
valuable  thing  for  doing  or  not  doing  any  official  act  as 
such  Commissioner,  other  than  the  fees  allowed  by  law,  he 


slwll  be  deemed  guilty  of  a  felony,  and,  upon  conviction, 
shall  be  imprisoned  in  the  State  Penitentiary  not  less  thmi 
one,  nor  more  than  -five  years.  [Sections  13  and  17,  Chapter 
58,  Acts  of  1873.] 

Sec.  4.  Be  it  further  enacted,  That  before  granting  cer- 
tificates of  authority  to  an  insurance  company  to  issue  poli- 
cies or  make  contracts  of  insurance,  the  Insurance  Commis- 
sioner shall  be  satisfied,  by  such  examination  and  evidence 
as  he  sees  fit  to  make  and  require,  that  such  company  is 
duly  qualified  under  the  laws  of  the  State  to  transact  busi- 
ness herein.  As  often  as  once  in  three  years  the  Insur- 
ance Commissioner  shall,  personally,  or  by  his  deputy,  or 
some  competent  person  appointed  by  him  for  that  purpose, 
visit  each  domestic  insurance  company  and  examine  its 
affairs,  especially  as  to  its  financial  condition  and, ability  to 
fulfill  its  obligations,  and  whether  it  has  complied  with  the 
law.  He  shall  also  make  an  examination  of  any  such  com- 
pany whenever  he  deems  it  prudent  to  do  so,  or  upon  the  re- 
quest of  five  or  more  of  the  stockholders  or  persons  peculiar- 
ly [pecuniarily]  interested  therein,  who  shall  make  affidavit 
of  their  belief,  with  specifications  of  their  reasons  therefor, 
that  such  company  is  in  an  unsound  condition.  Whenever 
he  deems  it  prudent  for  the  protection  of  policy  holders  in 
this  State,  he  shall,  in  like  manner,  visit  and  examine,  or 
cause  to  be  visited  and  examined  by  some  competent  person 
or  persons  he  may  appoint  for  that  purpose,  any  foreign 
insurance  company  applying  for  admission  or  already  ad- 
mitted to  do  business,  by  agencies,  in  this  State.  For  the 
purpose  aforesaid,  the  Commissioner  or  his  deputy,  or  per- 
son making  the  examination,  shall  have  free  access  to  all 
the  books  and  papers  of  an  insurance  company  that  relate 
to  its  business,  and  to  the  books  and  papers  kept  by  any  of 
its  agents,  and  may  summon  and  qualify  as  witnesses,  under 
oath,  and  examine  the  directors,  officers,  agents  and  trus- 
tees of  any  such  company  and  any  other  persons  in  rela- 
tion to  its  affairs,  transactions  and  condition.  Any  insur- 
ance company  examined  under  the  provisions  of  this  Act, 
shall  pay  the  proper  charges  incurred  in  such  examination, 
including  the  expenses  of  the  Insurance  Commissioner  or 


his  deputy,  and  the  expenses  and  compensation  of  his  assist- 
ants employed  therein ;  the  compensation  of  no  expert  for 
examining  the  books  or  business  of  any  local  company 
shall  exceed  $io  per  day. 

Sec.  5.  Be  it  further  enacted,  That  if  the  Insurance 
Commissioner  is  of  opinion,  upon  examination  or  other  evi- 
dence, that  a  foreign  insurance  company  is  in  an  unsound 
condition ;  or  if  a  life  insurance  company,  that  its  actual 
funds,  exclusive  of  its  capital,  are  less  than  its  liabilities;  or 
if  a  foreign  insurance  company  has  failed  to  comply  with 
the  law,  or  if  it,  its  officers  or  agents,  refuse  to  submit  to 
examination  or  to  perform  any  legal  obligations  in  relation 
thereto,  or  fail  to  pay  any  final  judgment  against  it  by  a  citi- 
zen of  the  State,  he  shall  revoke  or  suspend  all  certificates 
of  authority  granted  to  it  or  its  agents,  and  shall  cause  noti- 
fication thereof  to  be  published  in  one  or  more  newspapers 
of  general  circulation,  and  no  new  business  shall  thereafter 
be  done  by  it  or  its  agents  in  this  State  while  such  default 
or  disability  continues,  nor  until  its  authority  to  do  business 
is  restored  by  the  Insurance  Commissioner;  Provided,  how- 
ever, That  unless  the  ground  for  revocation  or  suspension 
relates  only  to  the  financial  condition  or  soundness  of  the 
company,  or  to  a  deficiency  in  its  assets,  he  shall  notify  the 
company  not  less  than  ten  days  before  revoking  its  author- 
ity to  do  business  in  this  State,  and  he  shall  specify  in  the 
notice  the  particulars  of  the  supposed  violation.  If,  upon 
examination,  the  Insurance  Commissioner  is  of  opinion  that 
any  domestic  insurance  company  is  insolvent,  or  has  ex- 
ceeded its  powers,  or  has  failed  to  comply  with  any  provis- 
ion of  the  law,  or  that  its  condition  is  such  as  to  render  its 
further  proceedings  hazardous  to  the  public  or  to  its  policy 
holders,  he  shall  apply  to  a  court  of  competent  jurisdiction, 
through  the  Attorney-General  for  the  State,  to  issue  an  in- 
junction restraining  it,  in  whole  or  in  part,  from  further 
proceeding  with  its  business.  Such  court  may,  in  its  dis- 
cretion, issue  the  injunction  forthwith,  or  upon  notice  and 
hearing  thereon,  and  after  a  full  hearing  of  the  matter, 
may  dissolve  or  modify  such  injunction  or  make  it  perpet- 


ual,  and  may  make  all  orders  and  decrees  needful  in  the 
premises,  and  may  appoint  agents  or  receivers  to  take  pos- 
session of  the  property  and  effects  of  the  company  and  to 
settle  its  affairs,  subject  to  such  rules  and  orders  as  the  court 
may  from  time  to  time  prescribe,  according  to  the  course 
of  proceeding  in  equity.  The  Attorney-General  shall  be 
allowed  compensation  for  his  services  out  of  the  assets  of 
the  delinquent  company. 

Sec.  6.  Be  it  further  enacted,  That  whenever  it  appears 
to  the  Insurance  Commissioner  that  the  capital  stock  of  a 
domestic  insurance  company  is  impaired  to  the  extent  of 
twenty  per  cent  or  more,  he  shall  notify  the  companv  that 
its  capital  is  legally  subject  to  be  made  good;  and  if  such 
company  shall  not,  within  sixty  days  after  such  notice, 
satisfy  him  that  it  has  fully  repaired  its  capital,  or  reduced 
its  capital  as  provided  by  law,  he  shall  institute  proceed- 
ings against  it  in  acordance  with  the  preceding  section. 

Sec.  7.  Be  it  further  enacted.  That  when  the  actual 
funds  of  a  domestic  life  insurance  company,  exclusive  of 
its  capital,  are  not  of  a  net  cash  value  equal  to  its  liabili- 
ties, including  the  net  value  of  its  policies,  computed  by 
the  rule  of  valuation  established  by  Section  8,  he  shall  notify 
such  company  and  its  agents  to  issue  no  new  policies  until 
its  funds  become  equal  to  its  liabilities. 

Sec.  8.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  each  year  compute  the  net  value  on  the 
31st  day  of  December  of  the  preceding  year  of  all  out- 
standing policies  of  life  insurance  in  companies  authorized 
to  make  insurance  on  lives  in  this  State  upon  the  basis  of 
the  "Combined  Experience  or  Actuaries'  Table,"  or 
"American  Experience  Table"  rate  of  mortality,  with  the 
interest  at  four  per  cent  per  annum ;  and  the  aggregate  net 
value  so  ascertained  of  the  policies  of  any  such  company 
shall  be  deemed  its  liability  on  account  of  its  policy  obliga- 
tions, other  than  accrued  claims,  to  provide  for  which  it 
shall  hold  funds,  in  secure  investments,  of  an  amount  equal 
to  such  net  value  above  all  its  other  liabilities.     Whenever 


— II — 

a  foreign  life  insurance  company  shall  present  to  the  In- 
surance Commissioner  a  certificate  from  the  Insurance  Com- 
missioner of  another  State  as  to  the  value  of  its  policies 
in  force,  the   Insurance   Commissioner  of  this   State   shall 
be  allowed  to  accept  such  valuation  in  lieu  of  his  own  valua- 
.  tion ;  Provided,  That  the  valuation  shall  be  made  according 
to  the  standard  fixed  in  this  section.    To  determine  the  lia- 
bility upon  the  contracts  of  insurance   for   foreign   insur- 
ance companies  other  than  life,  the  Insurance  Commissioner 
shall  require  such  companies  to  charge,  as  the  liability  for 
reinsurance   of   outstanding  policies   fifty   per  cent   of  the 
premium  received  on  policies  or  risks  having  not  more  than 
one  year  to  run,  and  a  pro  rata  of  all  premiums  received  on 
policies  or  risks  having  more  than  one  year  to  run.     To 
dctcrmi)ic  the  liability  upon   the  contracts  of  insurance  of 
a  domestic  insurance  company,  other  than  life,  the  Insur- 
ance Commissioner  shall  require  such  companies  to  charge 
as  the  liabilities  for  reinsurance  of  its  outstanding  policies 
fifty  per  cent  of  the  premiums  received  on  policies  or  risks 
having  not  more  than  one  year  to  run,  and  a  pro  rata  of 
all  premiums  received  on  policies  or  risks  having  more  than 
one  year  to  run,  after  first  deducting  from  said  premiums 
the  actual  amount  retained  by,  or  paid  to,  the  agent  as  com- 
mission  on   such   premiums    [Chapter   37,   Acts   of    1897]. 
The  Insurance  Commissioner  shall  allow  the  credit  of  an 
insurance  company  in  the   account   of  its   financial   condi- 
tion only  such  assets  as  are  or  can  be  made  available  for 
the  payment  of  losses  in  Tennessee,  but  may  credit   any 
deposits   of   funds   of  the   company   set   apart   as    security 
for  a  particular  liability.     He  shall  not  allow  stockholders' 
obligations  of  any  description  as  part  of  the  assets  or  capital 
of  any  insurance  company,  unless  the  same  are  secured  by 
competent  collateral. 

Sec.  9.  Be  it  further  enacted.  That  no  foreign  insurance 
company  shall  be  admitted  and  authorized  to  do  business 
in  this  State  until — 

I.  It  shall  file  or  deposit  with  the  Insurance  Commissioner 


-12 


a  properly  certified  copy  of  its  charter,  or  deed  of  settle- 
ment, and  a  statement  of  its  financial  condition  and  business 
on  the  31st  day  of  December  preceding  the  day  on  which  it 
shall  apply  for  permission  to  transact  such  business  in  such 
form  and  detail  as  the  Insurance  Commissioner  may  require, 
signed  and  sworn  to  by  its  president  and  secretary,  or  other 
proper  officers,  and  shall  pay  for  the  filing  of  such  copy  and 
statement  the  sum  of  thirty  ($30)  dollars. 

2.  It  shall  satisfy  the  Insurance  Commissioner  that  it  is 
fully  and  legally  organized  under  the  laws  of  its  State  or 
government  to  do  the  business  it  proposes  to  transact ;  that 
if  a  life  insurance  company,  it  has  on  deposit  with  the 
Treasurer  of  this  State,  or  with  the  proper  officer  of  some 
other  State,  securities  to  the  actual  cash  value  of  at  least  one 
hundred  thousand  ($100,000)  dollars,  consisting  of  the 
bonds  of  this  State,  the  United  States,  or  the  State  in  which 
such  company  is  organized,  or  notes  or  bonds  secured  by 
mortgages  on  real  estate  for  double  the  amount,  and  such 
companies  shall  file  with  the  Insurance  Commissioner  the 
certificate  of  the  official  with  whom  the  securities  are  de- 
posited, stating  the  time  and  amount  of  each  of  said  bonds, 
notes  or  stocks,  and  that  he  is  satisfied  that  they  are  worth 
one  hundred  thousand  ($100,000)  dollars,  and  that  the  de- 
posit is  made  with  him  by  the  company  for  the  protection 
of  all  policy  holders  and  creditors  in  the  United  States ; 
that  if  an  insurance  company  other  than  life  it  has  an 
actual  paid  up  cash  capital  of  not  less  than  one  hundred 
thousand  dollars,  of  which  at  least  seventy-five  thousand 
dollars  shall  he  invested  in  bonds  of  the  United  States  or 
other  good  securities,  to  be  certified  as  such  by  the  Insur- 
ance Commissioner  of  the  State  in  zvhich  said  company  is 
organized,  reckoning  the  same  at  their  current  market  value, 
or  in  lieu  of  the  cash  capital  stock,  such  company  shall  have 
and  maintain  a  warranty  capital  or  surplus  above  all  liabili- 
ties, including  the  re-insurance  reserve,  of  not  less  than  one 
hundred  thousand  dollars  [Chapter  493,  Acts  of  1907]  ; 
Provided,  hozvever,  That  companies  transacting  the  busi- 
ness of  plate-glass  or  live  stock  insurance  exclusively  shall 


—13— 

not  be  required  to  have  a  cash  capital  or  surplus  of  more 
than  one  hundred  thousand  ($100,000)  dollars.  Provided 
further,  That  companies  organised  under  the  authority  and 
patronage  of  churches  or  religious  denominations  for  the 
exclusive  purpose  of  insuring  the  property  of  churches 
against  loss  or  damage  by  fire,  lightning  or  storm,  shall  not 
be  required  to  have  a  cash  capital  of  more  than  $50,000,  nor 
shall  they  be  required  to  deposit  more  than  fifty  thousand 
($50,000)  dollars  in  cash  or  securities  zvith  the  Treasurer 
of  this  or  any  other  State  under  the  provisions  of  the  tenth 
section  of  this  Act  [Chapter  131,  Acts  of  1901]. 

3.  It  shall,  by  duly  executed  instrument  filed  in  his  office, 
constitute  and  appoint  the  Insurance  Commissioner,  or  his 
successor,  its  true  and  lawful  attorney,  upon  whom  all  law- 
ful processes  in  any  action  or  legal  proceeding  against  it 
may  be  served,  and  therein  shall  agree  that  any  lawful  pro- 
cess against  it,  which  may  be  served  upon  its  said  attorney, 
shall  be  of  the  same  force  and  validity  as  if  served  on  the 
company,  and  that  the  authority  thereof  shall  continue  in 
force,  irrevocably,  as  long  as  any  liability  of  the  company 
remains  outstanding  in  this  State.  Any  process  issued  by 
any  courts  of  record  in  this  State,  and  served  upon  such 
commissioner  by  the  proper  officer  of  the  county  in  which 
said  commissioner  may  have  his  office,  shall  be  deemed  a 
sufficient  process  on  said  company,  and  it  is  hereby  made 
the  duty  of  the  Insurance  Commissioner,  promptly  after 
such  service  of  process  by  any  claimant,  to  forward,  by 
registered  mail,  an  exact  copy  of  such  notice  to  the  company. 

//  any  insurance  company  shall,  zvithout  the  consent  of 
the  other  party  to  any  suit  or  proceeding  brought  by  or 
against  it  in  any  court  of  this  State,  remove  said  suit  or  pro- 
ceedings against  any  citizen  of  this  State  to  any  Federal 
Court,  it  shall  be  the  duty  of  the  Insurance  Commissioner 
to  forthzvith  revoke  its  authority  to  do  business  in  this  State, 
and  to  publish  such  order  of  revocation  in  some  newspaper 
of  general  circulation  published  in  this  State  [Chapter  253, 
Acts  of  1907]. 

Sec.  10.     Be  it  further  enacted,  That  any  foreign  com- 


—14— 

pany.  if  incorporated  or  associated  under  the  laws  of  any 
government  or  State  other  than  the  United  States,  shall 
not  be  admitted  until,  besides  complying  with  the  condi- 
tions of  Section  9,  it  has  made  a  deposit  with  the  Treas- 
urer of  this  State,  or  with  the  financial  officer  of  some  other 
State  of  the  United  States,  a  sum  of  not  less  than  two  hun- 
dred thousand  ($200,000)  dollars.  Such  deposit  must  be  in 
exclusive  trust  for  the  benefit  and  security  of  all  the  com- 
pany's policy  holders  and  creditors  in  the  United  States,  and 
may  be  made  in  bonds  of  this  State  or  of  the  United  States, 
or  of  some  State  in  the  United  States,  or  other  good  securi- 
ties satisfactory  to  the  Insurance  Commissioner,  and  such 
deposit  shall  be  deemed,  for  all  purposes  of  the  insurance 
law,  the  capital  of  the  company. 

Sec.  II.  Be  it  further  enacted,  That  any  admitted  com- 
pany of  a  foreign  country  may  appoint  trustees  who  are 
citizens  of  the  United  States  and  approved  by  the  Insurance 
Commissioner  to  hold  funds  in  trust  for  the  benefit  of  its 
policy  holders  and  creditors  in  the  United  States ;  said  trus- 
tees shall  be  named  by  the  directors  of  the  company  and  a 
certified  copy  of  the  record  of  the  appointment  of  such 
trustees  and  of  the  deed  of  trust  shall  be  filed  in  the  office 
of  the  Insurance  Commissioner,  who  may  examine  such 
trustees  and  the  assets  in  trust,  and  all  books  and  papers 
relating  thereto  in  the  same  manner  that  he  may  examine 
the  officers,  agents,  assets  and  afifairs  of  insurance  com- 
panies. The  funds  so  held  by  such  trustee,  so  far  as  the 
same  are  in  securities,  money  or  credits,  admissible  as  sound 
assets  in  the  financial  accounts  of  insurance  companies,  shall, 
together  with  its  deposits  made  in  accordance  with  Section 
10,  constitute  the  assets  of  such  company  as  regards  its 
policy  holders  and  creditors  in  the  United  States. 

Sec.  12  Be  it  further  enacted,  That  the  authority  of  a 
foreign  insurance  company  may  be  revoked  if  it  shall  vio- 
late or  neglect  to  comply  with  any  provision  of  law  obliga- 
tory upon  it,  and,  whenever  in  the  opinion  of  the  Insurance 
Commissioner,  its  condition  is  imsound,  or  its  assets  above 
its  liabilities,  exclusive  of  capital  and  inclusive  of  unearned 


—15— 

premiums  as  provided  in  Section  8,  are  less  than  the  amount 
of  its  original  capital  or  required  unimpaired  funds. 

Sec.  13.  Be  it  further  enacted,  That  every  life  insurance 
company  doing  business  in  Tennessee,  chartered  by  the  laws 
of  this  State,  shall  be  required,  for  the  better  protection  of 
the  policy  holders,  to  keep  at  all  times  the  sum  of  one  hun- 
dred thousand  ($100,000)  dollars  invested  in  bonds,  secu- 
rities or  mortgages  on  real  estate  for  double  the  amount 
loaned,  to  be  certified  as  safe  and  worth  this  amount  by  the 
Insurance  Commissioner.  Insurance  companies  other  than 
life,  chartered  by  the  laws  of  this  State,  shall  not  be  allowed 
to  transact  business  in  this  State,  unless  possessed  of  at 
least  fifty  thousand  ($50,000)  dollars  paid  up  actual  cash 
capital ;  or  in  lieu  of  cash  capital,  a  stock  guaranty  capital 
or  surplus,  above  all  liabilities,  including  reinsurance  reserve 
of  not  less  than  fifty  thousand  ($50,000)  dollars;  it  being 
understood  that  this  section  does  not  apply  to  companies 
organized  under  the  laws  of  this  State  prior  to  the  passage 
of  this  Act,  and  actually  engaged  in  the  transaction  of 
insurance  business. 

Sec.  14.  Be  it  further  enacted,  That  every  insurance 
company  licensed  to  do  business  in  this  State  under  the  pro- 
visions of  this  Act,  shall  obtain  from  the  Insurance  Commis- 
sioner a  certificate  of  authority  for  every  agent  writing  or 
soliciting  insurance  for  them  in  this  State,  and  such  certifi- 
cate shall  be  renewable  in  January  of  each  year. 

Sec.  15.  Be  it  further  enacted.  That  associations  of  in- 
dividuals, citizens  of  the  United  States,  whether  organized 
within  the  State  or  elsewhere  within  the  United  States, 
formed  upon  the  plan  known  as  Lloyd's,  whereby  each 
associate  underwriter  becomes  liable  for  a  proportionate  part 
of  the  whole  amount  insured  by  policy,  may  be  authorized 
to  transact  insurance  other  than  life  in  this  State,  in  like 
manner  and  upon  the  same  terms  and  conditions  as  are  re- 
quired of  and  imposed  upon  insurance  companies  of  the 
United  States,  or  one  of  the  United  States ;  Provided,  how- 
ever, That  all  such  Lloyd's,  whether  organized  within  this 


— 16— 

State  or  elsewhere  in  the  United  States,  not  having  an 
actual  paid  up  cash  capital,  shall  make  the  same  deposit 
and  upon  the  same  terms  and  conditions  as  is  required  by 
Section  lO  of  this  Act,  of  foreign  insurance  companies  in- 
corporated or  associated  under  the  laws  of  any  government 
or  State  other  than  the  United  States  or  one  of  the  United 
States. 

Sec.  1 6.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall,  in  December  each  year,  furnish  to  each  of 
the  insurance  companies  authorized  to  do  business  under 
the  provisions  of  this  Act  two  or  more  blanks  in  form 
adopted  for  their  annual  statement,  and  such  companies 
shall,  annually,  on  or  before  the  ist  day  of  February,  file 
in  the  office  of  the  Insurance  Commissioner  a  statement 
which  shall  exhibit  its  financial  condition  on  the  thirty- 
first  (31st)  day  of  December  of  the  previous  year,  and  its 
business  of  that  year.  For  good  cause  shown,  the  Commis- 
sioner may  extend  the  time  within  which  such  statement 
may  be  filed,  but  not  later  than  the  first  (ist)  day  of  March. 
Every  such  annual  statement  shall  be  in  the  form  and  of  the 
specifications  the  Insurance  Commissioner  may  require.  The 
assets  and  liabilities  shall  be  computed  and  allowed  in  snch 
statement  in  accordance  with  the  rules  in  this  Act.  Such 
statement  shall  be  subscribed  and  sworn  to  by  the  presi- 
dent and  secretary,  or,  in  their  absence,  by  two  of  its  prin- 
cipal officers.  The  annual  statement  of  a  company  of  a 
foreign  country  shall  embrace  only  its  business  and  condi- 
tion in  the  United  States,  and  shall  be  subscribed  and  sworn 
to  by  its  resident  manager  or  principal  representative  in 
charge  of  its  American  business. 

Sec.  17.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  keep  and  preserve  in  a  permanent  form  a 
record  of  his  proceedings,  including  a  concise  statement  of 
the  result  of  official  examinations  of  insurance  companies. 
He  shall  annually,  and  as  early  as  consistent  with  full  and 
accurate  preparation,  make  a  report  to  the  Governor  of  his 
official  transactions,  and  shall  include  in  such  report  a  state- 
ment of  the  receipts  and  expenditures  of  his  department  for 


—17— 

the  preceding  year,  an  exhibit  of  the  financial  condition  and 
business  transactions  of  the  several  insurance  companies  as 
disclosed  by  their  annual  statements,  abstracts  of  which 
statements  shall  appear  therein,  and  such  other  information 
and  comments  in  relation  to  insurance  and  the  public  interest 
therein  as  he  deems  fit  to  communicate. 

Sec.  1 8.  Be  it  further  enacted,  That  when  a  company 
asking  admission  to  the  State  desires  to  do  more  than  one^ 
character  or  class  of  insurance,  the  Insurance  Commissioner 
shall  require  said  company  to  elect  which  class  or  kind 
of  insurance  it  will  write,  and  grant  license  to  said  com- 
pany to  do  only  that  class  or  character  of  business ;  Pro- 
vided, hoivevcr,  If  said  company's  capital  stock,  reserve 
funds,  or  assets,  when  prorated  between  two  or  more  classes 
of  business  the  company  desires  to  write,  shall  be  sufficiently 
large,  which,  when  divided  by  the  number  of  classes  of 
business  the  company  proposes  to  transact,  to  give  to  each 
character  of  business  two  hundred  thousand  ($200,000)  dol- 
lars of  assets  or  capital  stock,  and  one  hundred  thousand 
($100,000)  dollars,  invested  as  the  law  requires  of  a  com- 
pany doing  only  one  class  of  business,  said  Commissioner 
shall  then  grant  license  to  said  company  to  transact  the  sev- 
eral kinds  of  insurance  provided  for  by  this  Act. 

Sec.  19.  Be  it  further  enacted,  That  each  and  every  for- 
eign insurance  company  doing  business  under  the  provisions 
of  this  Act,  shall,  in  January  and  July  of  each  year,  report, 
under  oath  of  the  President  and  Secretary,  or  other 
chief  officer  of  such  company,  to  the  Insurance  Commis- 
sioner, the  total  amount  of  gross  premiums  received  in  this 
State  within  the  six  months  next  preceding  the  first  of  Jan- 
uary and  July,  or  since  the  last  return  of  such  premiums 
were  made  by  such  company;  and  shall,  at  the  same  time, 
pay  into  the  treasury  of  the  State  the  sum  of  two  dollars 
and  fifty  cents  ($2.50)  upon  each  one  hundred  dollars  of 
said  gross  premiums  so  ascertained,  which  shall  be  in  lieu 
of  all  other  taxes.  And  any  company  failing  or  neglecting^ 
to  make  such  returns  and  payments  promptly  and  correctly. 


shall  forfeit  and  pay  to  the  State,  in  addition  to  the  amount 
of  said  taxes,  the  sum  of  five  hundred  ($500)  dollars;  and 
the  company  so  failing  or  neglecting  for  sixty  (60)  days 
shall  thereafter  be  debarred  from  transacting  any  business 
of  insurance  in  this  State,  until  said  taxes  and  penalties  are 
fully  paid,  and  the  Insurance  Commissioner  shall  revoke  the 
certificate  of  authority  granted  to  the  agent  or  agents  of  that 
company  to  transact  business  in  the  State.  Domestic  in- 
surance companies  shall,  at  the  same  time,  and  in  the  same 
manner,  pay  one  dollar  and  fifty  cents  ($1.50)  on  each  one 
hundred  ($100)  dollars  of  gross  premiums  received  on  poli- 
cies issued  in  this  State,  and  be  subjected  to  the  penalties 
provided  for  foreign  companies. 

Sec.  20.  Be  it  further  enacted.  That  whenever  the  exist- 
ing or  future  laws  of  any  other  State  of  the  United  States 
shall  require  insurance  companies  incorporated  by  or  organ- 
ized under  the  laws  of  this  State,  or  the  agents  thereof,  any 
deposit  of  securities  in  such  State  for  the  protection  of 
policy  holders,  or  otherwise,  greater  than  the  amount  re- 
quired for  similar  purposes  from  similar  companies  of  other 
States  by  the  then  existing  laws  of  this  State,  then  in  every 
such  case  all  companies  of  such  States  establishing,  or  hav- 
ing heretofore  established,  an  agency,  or  agencies,  in  this 
State,  shall  be,  and  are  hereby  required,  to  make  the  same 
deposit  for  a  like  purpose  with  the  Treasurer  of  the  State, 
and  to  pay  into  the  treasury  of  this  State  the  taxes,  fines, 
penalties,  license  fees,  or  otherwise,  an  amount  equal  to 
the  amount  of  such  charges  and  payments  imposed  by  law 
of  such  State  upon  companies  of  this  State  and  the  agents 
thereof. 

Sec.  21.  Be  it  further  enacted,  That  whenever  any 'in- 
surance company  publishes  its  assets  it  shall,  in  the  same 
connection  and  with  equal  conspicuousness,  publish  its  lia- 
bilities, computed  on  the  basis  allowed  for  its  annual  state- 
ments, and  any  publication  purporting  to  show  its  capital 
shall  exhibit  the  amount  of  such  capital  as  has  been  paid  in 
cash.     Such  publication  shall  be  held  to  include  all  policies, 


—19— 

renewals,  signs,  circulars,  cards,  or  other  means  by  which 
public  announcements  are  made. 

Sec.  22.  Be  it  further  enacted,  That  no  written  or  oral 
misrepresentation  or  warranty  therein  made  in  the  nego- 
tiations of  a  contract  or  policy  of  insurance,  or  in  the 
application  therefor,  by  the  assured  or  in  his  behalf,  shall  be 
deemed  material  or  defeat  or  void  the  policy  or  prevent  its 
attaching,  unless  such  misrepresentation  is  made  with  actual 
intent  to  deceive,  or  unless  the  matter  represented  increase 
the  risk  of  loss. 

Sec.  23.  Be  it  further  enacted,  ThsLt  no  policy  of  insur- 
ance issued  to  a  citizen  of  this  State  by  an  authorized  com- 
pany organized  under  the  laws  of  a  foreign  country  shall 
be  invalidated  by  the  occurrence  of  hostilities  between  such 
foreign  country  and  the  United  States. 

Sec.  24  Be  it  further  enacted,  That  the  Treasurer  of 
the  State,  in  his  official  capacity,  shall  take  and  hold  in  trust 
deposits  made  by  any  domestic  insurance  company  for  the 
purpose  of  complying  with  the  laws  of  any  other  State,  to 
enable  such  company  to  do  business  in  such  State ;  and  shall 
also,  in  a  like  manner,  take  and  hold  any  deposits  made  by 
a  foreign  insurance  company  under  any  law  of  the  State. 
The  company  making  such  deposits  shall  be  entitled  to  the 
income  thereof,  and  may,  from  time  to  time,  with  the  con- 
sent of  the  Treasurer,  when  not  forbidden  by  the  law  under 
which  the  deposits  are  made,  change  in  whole,  or  in  part,  the 
securities  which  compose  the  deposit  for  other  competent 
securities  of  equal  value.  Upon  request  of  any  domestic 
insurance  company,  said  Treasurer  may  return  to  such  com- 
pany the  whole  or  any  portion  of  the  securities  of  such  com- 
pany, when  he  shall  be  satisfied  that  the  securities  so  a.'^  ■  ■! 
to  be  returned  are  subject  to  no  liability,  and  not  required 
to  be  longer  held  by  any  provision  of  law  or  purpose  of 
the  original  deposit;  and  he  may  return  to  the  trustees  or 
other  representatives  authorized  for  that  purpose,  of  a  for- 
eign insurance  company,  any  deposit  made  by  such  company, 
when  it  shall  appear  that  such  company  has  ceased  to  do 


-20- 


business  in  the  State,  and  is  under  no  obligations  to  policy 
holders  or  other  persons  in  the  State,  or  in  the  United  States, 
for  whose  benefit  such  deposit  was  made. 

Sec.  25.  Be  it  further  enacted,  That  it  shall  not  be  law- 
ful for  the  directors,  trustees  or  managers  of  any  insur- 
ance company  incorporated  by  the  laws  of  this  State,  to 
make  any  dividend  except  from  the  surplus  profits.  Any 
dividend  made  contrary  to  this  Act  shall  subject  the  com- 
pany making  the  same  to  a  forfeiture  of  its  charter,  and 
each  stockholder  receiving  it,  to  a  liability  to  the  creditors 
of  such  company  to  the  extent  of  double  the  amount  of  the 
dividend  declared. 

Sec.  26.  Be  it  further  enacted.  That  no  domestic  insur- 
ance company  shall  commence  business  until  it  has  filed 
with  the  Insurance  Commissioner  a  properly  certified  copy 
of  its  charter,  and  a  statement  of  its  financial  condition,  in 
such  form  and  detail  as  the  Commissioner  may  require, 
and  received  from  the  said  Commissioner  a  certificate  of 
authority  to  do  business. 

Sec.  27.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  collect  and  pay  into  the  treasury  the  fol- 
lowing fees :  For  each  company  filing  copy  of  charter  or 
deed  of  settlement  and  financial  statement,  thirty  ($30) 
dollars ;  for  each  life  insurance  company's  annual  state- 
ment, twenty-five  ($25)  dollars;  for  each  insurance  com- 
pany's, other  than  life,  annual  statement,  fifteen  ($15)  dol- 
lars; for  each  certificate  or  renewal  thereof,  to  an  insur- 
ance agent,  two  ($2)  dollars;  for  valuation  of  life  poli- 
cies, two  (2)  cents  for  each  thousand  ($1,000)  dollars  in- 
surance; for  each  seal  of  office,  with  certificate,  one  ($1) 
dollar;  for  copies  of  any  paper  on  file  or  deposit  with  the 
Insurance  Commissioner  or  in  his  office,  twenty  (20)  cents 
per  folio. 

Sec.  28.  Be  it  further  enacted,  That  no  life  insurance 
company  doing  business  in  Tennessee  shall  make  or  per- 
mit any  distinction  or  discrimination  between  insurants  of 
the  same  class  and  equal  expectation  of  life  in  the  amount 


21 — 

or  payment  of  premiums,  or  rates  charged  for  policies  of 
life  or  endowment  insurance,  or  in  the  dividends  or  other 
benefits  payable  thereon,  or  any  other  of  the  terms  and  con- 
ditions of  the  contracts  it  makes;  nor  shall  any  such  com- 
pany, or  any  agent  thereof,  make  any  contract  of  insurance 
or  agreement  as  to  such  contract  other  than  is  plainly  ex- 
pressed in  the  policy  issued  thereon ;  nor  shall  any  such 
company  or  agent  pay  or  allow,  or  offer  to  pay  or  allow  as 
an  inducement  to  insurance,  any  rebate  of  premium  payable 
on  the  policy,  or  any  special  favor  or  advantage  in  the  divi- 
dends or  other  benefits  to  accrue  thereon,  or  any  valuable 
consideration  or  inducement  whatever,  not  specified  in  the 
policy  contract  of  insurance. 

Sec.  29.  Be  it  further  enacted.  That  any  life  insurance 
company*  which  shall  violate  any  of  the  provisions  of  Sec- 
tion 28  shall  be  fined  in  a  sum  not  less  than  one  hundred 
($100)  dollars,  nor  exceeding  five  hundred  ($500)  dollars, 
to  be  recovered  by  action  by  the  Insurance  Commissioner 
in  the  name  of  the  State,  and  the  amount  so  recovered  shall 
be  paid  into  the  State  Treasury.  An  officer  or  agent  of  any 
such  company  who  shall  violate  any  of  the  provisions  of 
said  section  shall  be  deemed  guilty  of  a  misdemeanor,  and, 
upon  conviction  thereof,  shall  be  fined  in  any  sum  not  less 
than  one  hundred  ($100)  dollars  nor  exceeding  two  hun- 
dred ($200)  dollars,  or  imprisonment  in  the  county  jail 
not  exceeding  thirty  (30)  days,  or  both,  at  the  discretion 
of  the  court. 

Sec.  30.  Be  it  further  enacted,  That  any  person  who 
solicits  insurance  on  behalf  of  any  insurance  company  not 
organized  under  or  incorporated  by  the  laws  of  this  State 
until  such  company  has  fully  complied  with  all  the  require- 
ments of  this  Act,  and  until  such  company  has  received  from 
the  Insurance  Commissioner  the  certificate  of  authority  to 
transact  the  business  of  insurance  in  this  State,  or  who  takes 
or  transmits,  other  than  for  himself,  any  application  for 
insurance,  or  any  policy  for  insurance  to  or  from  such  com- 
pany, or  who  advertises  or  otherwise  gives  notice  that  he 
will  receive  or  transmit  the  same,  or  who  shall  receive  or 


— 22 — 

deliver  a  policy  of  insurance  of  any  such  company,  ,or  who 
shall  examine  or  inspect  a  risk,  or  receive,  collect  or  trans- 
mit any  premium  or  insurance,  or  make  or  form  any  dia- 
gram of  any  building  or  buildings,  or  do  or  perform  any 
other  act  or  thing  in  the  making  with  or  for  any  insurances, 
or  consummating  of  any,  contract  of  insurance  companies, 
other  than  for  himself,  or  who  shall  examine  into  or  adjust, 
or  aid  in  adjusting,  any  loss  for  or  on  behalf  of  any  such 
insurance  company,  whether  any  such  acts  shall  be  done  at 
the  request  or  instance  or  by  the  employment  of  such  in- 
surance company,  or  of  or  by  any  broker  or  other  person, 
shall  be  held  guilty  of  a  misdemeanor ;  and,  upon  convic- 
tion by  a  court  having  jurisdiction,  shall  be  fined  not  less 
than  one  hundred  ($ioo)  dollars  nor  more  than  two  hun- 
dred ($200)  dollars,  or  shall  be  imprisoned  in  the  county 
jail  not  more  than  thirty  (30)  days,  or  both,  in  the  discre- 
tion of  the  court ;  Provided,  hozvevcr,  That  nothing  con- 
tained in  this  section  shall  be  applicable  to  parties  placing 
insurance  in  accordance  with  the  provisions  of  this  Act 
authorizing  insurance  brokers  to  place  insurance  in  foreign 
companies. 

Provided,  ivhenever  miy  citizen  shall  file  an  affidavit 
zvith  the  Insurance  Couimissioncr,  that  he  is  unable  to  pro- 
cure adequate  fire  insurance  from  licensed  compani':-s,  and 
shall  file  an  application  for  permission  for  a  representative 
of  any  designated  unlicensed  company  to  come  info  the 
State  for  the  purpose  of  inspecting  [his]  this  risk,  or  in  the 
event  of  loss,  to  adjust  such  loss,  it  shall  he  the  duty  of  the 
Insurance  Commissioner  to  issue  such  permit,  and  it  shall  be 
lawful  for  such  representative  of  such  unlicensed  company 
to  conic  into  the  State  for  the  purposes  specified  in  the  appli- 
cation, but  if  such  representative  of  an  unlicensed  company 
shall  make  or  attempt  to  make  any  diagrams  or  maps  of 
property  other  tJian  the  property  of  the  citizen  upon  ivhose 
application  the  permit  is  granted,  or  shall  examine  a  risk 
or  do  any  other  thing  prohibited  in  the  foregoing  part  of  this 
section,  he  shall  be  guilty  of  a  misdemeanor  and  upon  convic- 
tion punished  as  above  provided. 


—23— 

Provided  further.  That  os  a  eoiidition  to  granting  the 
above  permit  the  applicant  shall  be  required  to  pay  to  the 
State  two  and  one-half  per  eent  of  all  premiums  paid  by 
him  to  any  unlicensed  company  with  which  he  shall  place 
a  policy  of  insurance  [Chapter  492,  Acts  of  1907]. 

Sec.  31.  Be  it  further  enacted.  That  it  shall  not  be  law- 
ful for  any  person  or  persons  to  act  as  agent  or  solicit  risks, 
or  in  any  way,  directly  or  indirectly,  to  transact  the  business 
of  insurance  for  and  in  behalf  of  any  company,  whether 
organized  under  and  incorporated  by  the  laws  of  this  State 
or  not,  without  obtaining  a  certificate  of  authority  from  the 
Insurance  Commissioner  of  the  State  so  to  do,  which  cer- 
tificate shall  state  that  said  company  has  fully  complied  with 
all  the  requirements  of  this  Act  applicable  to  such  company. 
Whoever  shall  directly  or  indirectly  aid  in  transacting  insur- 
ance business  in  any  such  company  without  first  receiving 
such  certificate  of  authority,  or  having  received  such  cer- 
tificate of  authority,  shall,  after  receiving  from  such  Insur- 
ance Commissioner  notice  of  the  revocation  thereof,  con- 
tinue to  act  as  an  agent  for  any  such  company,  shall  be 
deemed  to  be  guilty  of  a  misdemeanor,  and  upon  convic- 
tion by  a  court  having  jurisdiction,  shall  be  fined  not  less 
than  fifty  ($50)  dollars  nor  more  than  one  hundred  ($100) 
dollars ;  Provided,  That  nothing  herein  contained  shall  ap- 
ply to  insurance  brokers  doing  business  in  this  State  for  for- 
eign insurance  companies,  as  provided  in  this  Act. 

Sec.  32.  Be  it  further  enacted,  That  an  agent  or  person 
shall  be  personally  liable  on  all  contracts  of  insurance  un- 
lawfully made  by  or  through  him,  directly  or  indirectly,  for 
or  in  behalf  of  any  insurance  company  not  authorized  to  do 
business  in  this  State. 

Sec.  33.  Be  it  further  enacted.  That  any  insurance  com- 
pany or  agent  thereof,  issuing  or  circulating  advertisements 
in  violation  of  Section  20  [21],  shall  be  punished  by  a  fine 
of  not  less  than  one  hundred  ($100)  dollars  nor  more  than 
five  hundred  ($500)  dollars. 

Sec  34.     Be  it  further  enacted.  That  any  insurance  com- 


—24— 

pany  that  neglects  to  make  and  file  its  annual  state  lient 
in  the  form  and  within  the  time  provided  by  Section  i6, 
shall  forfeit  one  hundred  ($ioo)  dollars  for  each  duy 
neglected,  and  upon  notice  by  the  Insurance  Commissioner 
to  that  effect,  its  authority  to  do  new  business  shall  cease 
while  each  such  default  continues.  For  wilfiiMy  making  a 
false  annual  or  other  statement  it  is  required  by  law  to 
make,  an  insurance  company  and  persons  making  oath  to 
or  subscribing  to  the  same,  shall  be  severally  punished  by 
a  fine  of  not  less  than  five  hundred  ($500)  dollars  nor 
more  than  one  thousand  ($1,000)  dollars.  Any  person 
making  oath  to  such  false  statement  shall  be  deemed  guilty 
of  the  crime  of  perjury. 

Sec.  35.  Be  it  further  enacted,  That  whoever,  without 
justifiable  cause,  neglects,  upon  due  summons,  to  appear 
and  testify  before  the  Insurance  Commissioner,  or  deputy 
or  person  appointed  by  him,  as  provided  in  Section  4,  and 
whoever  obstructs  the  Insurance  Commissioner,  his  deputy 
or  examiner,  in  his  examination  of  insurance  companies, 
shall  be  guilty  of  a  misdemeanor,  and  punished  by  a  fine  of 
not  more  than  five  hundred  ($500)  dollars. 

Sec.  36.  Be  it  further  enacted,  That  for  violation  of  any 
provision  of  this  Act,  the  penalty  whereof  is  not  specifically 
provided  herein,  the  offender  shall  be  punished  by  a  fine  of 
not  more  than  five  hundred  ($500)  dollars. 

Sec.  37.  Be  it  further  enacted,  That  every  penalty  fixed 
in  this  Act,  unless  otherwise  provided  for,  shall  be  sued 
for  and  recovered  in  the  name  of  the  State  of  Tennessee 
by  the  District  Attorney  of  the  district  in  which  such  delin- 
quency occurs,  and,  when  sued  for  by  him,  shall  be  paid 
into  the  State  Treasury,  less  thirty  per  cent,  to  be  paid  for 
his  services;  and  in  case  of  non-payment  of  such  penalties, 
the  party  so  offending  shall  be  liable  to  imprisonment  for 
a  period  not  exceeding  six  (6)  months,  in  the  discretion 
of  any  court  having  cognizance  thereof. 

Sec.  38.  Be  it  further  enacted,  That  inquisitorial  power 
be,  and  the  same  is  hereby,  given  the  grand  juries  of  this 


—25— 

State  to  inquire  into  any  violation  of  this  Act,  and  present 
or  indict  such  person  or  persons  violating  the  same,  and 
that  the  Judges  of  the  courts  of  this  State,  having  proper 
jurisdiction,  shall  give  this  in  charge  to  the  grand  juries  of 
their  respective  courts. 

Sec.  39.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  pay  out  of  the  fees  of  his  ofifice  the  neces- 
sary expenses  of  the  insurance  department,  including  the 
salary  of  his  deputy,  as  stated  in  Section  3  of  this  Act,  and 
shall  keep  an  accurate  record  of  all  receipts  and  expendi- 
tures, and  shall  require  and  preserve  sworn  vouchers  for 
each  payment,  and  the  excess  of  fees,  after  paying  neces- 
sary expenses,  shall  be  turned  into  the  State  Treasury. 

Sec.  40.  Be  it  further  enacted,  That  any  person  owning 
property  in  this  State,  or  having  an  insurable  interest  in 
the  same,  may  procure  fire  insurance  thereon  through  any 
insurance  brokers,  duly  licensed  under  this  Act.  To  render 
insurance  so  obtained  valid,  it  shall  not  be  necessary  that 
the  insurance  company  with  which  the  contract  is  made 
shall  be  doing  business  in  this  State,  or  be  authorized  to 
do  business  therein  by  the  Legislature  or  any  law  of  this 
State,  but  only  that  such  company  have  the  power  by  its 
charter  and  the  laws  of  the  State  or  country  in  which  the 
contract  is  made  to  bind  itself  by  such  contract. 

Sec.  41.  Be  it  further  enacted,  That  none  but  bona  fide 
residents  of  this  State,  of  good  moral  character  and  com- 
petent business  qualifications,  shall  be  licensed  as  insurance 
brokers,  and  who  shall  take  and  subscribe  the  following 
oath :  'T  do  swear  that  I  will  justly  and  uprightly  demean 
myself  as  an  insurance  broker,  and  will  explain  fully  the 
character,  residence  and  solvency  of  any  company  with 
which  I  shall  negotiate  for  insurance  on  property  in  this 
State,  and  will  not  deceive,  or  attempt  to  deceive,  any  who 
come  to  me  for  such  insurance,  in  any  way  whatsoever,  so 
help  me  God."  And  before  any  license  shall  issue  the  appli- 
cant shall  file  with  the  Insurance  Commissioner  a  properly 
certified  copy  of  the  charter  of  each  company  with  which 


—26— 

he  proposes  to  do  business  in  behalf  of  his  principals  or 
employes,  together  with  a  statement,  under  oath,  of  the 
president  and  secretary  of  every  such  company  in  such 
form  and  detail  as  the  Insurance  Commissioner  may  require. 
For  filing  certificates,  copies  of  charter,  and  for  all  other 
services  rendered  by  the  Insurance  Commissioner  under 
this  Act,  the  broker  shall  pay  the  same  fees  as  are  required 
of  insurance  companies  regularly  authorized  to  do  business 
in  this  State.  It  shall  be  the  duty  of  the  Insurance  Com- 
missioner to  examine  the  statements,  and,  if  satisfied  that 
the  same  are  correct,  that  the  company  is  solvent,  reliable 
and  in  good  standing,  and  that  the  applicant  is  not  only  a 
bona  iide  resident  of  this  State,  but  a  fit  and  proper  person 
to  exercise  the  calling  of  an  insurance  broker,  shall  license 
him  as  such,  designating  in  the  license  each  and  every 
insurance  company  with  which  he  is  authorized  to  con- 
tract beyond  the  limits  of  this  State.  Should  the  fact  at 
any  time  come  to  the  knowledge  of  the  Insurance  Commis- 
sioner that  any  insurance  company  designated  in  any  license 
issued  by  him  is  not  solvent,  he  shall  revoke  and  cancel  the 
license  in  so  far  as  it  authorizes  the  broker  to  contract  with 
that  company ;  and,  on  notice  from  the  Commissioner,  it 
shall  be  the  duty  of  the  broker  to  whom  it  was  issued  to  pre- 
sent it  forthwith  for  such  cancellation. 

Sec.  42.  Be  it  further  enacted,  That  it  shall  be  lawful 
for  every  duly  licensed  insurance  broker,  from  time  to  time, 
so  long  as  his  license  is  in  force,  to  make,  or  cause  to  be 
made,  inspections,  surveys,  diagrams  and  descriptions  of 
property  in  Tennessee  which  he  may  be  employed  to  have 
insured  beyond  the  limits  of  this  State,  and  to  forward  the 
same  to  any  insurance  company  specified  in  his  license,  as 
a  basis  for  contracting  with  such  company  for  insuring  the 
property;  and  in  case  of  loss  or  damage  after  the  insurance 
is  efifected,  it  shall  be  lawful  for  such  loss  or  damage  to  be 
adjusted  and  paid  in  the  manner  and  by  the  means  usual 
with  insurers  and  the  assured  for  so  doing.  No  penalty 
whatever  shall  be  incurred  by  any  inspector  or  adjuster,  or 
other  person,  for  participating  bona  -fide  in  these  transac- 


—27— 

tions.  It  shall  also  be  lawful  for  any  such  broker  to  for- 
ward cash  premiums  or  installments,  premium  notes,  and 
all  documents  whatsoever  requisite  to  procure  and  keep  up 
the  insurance  for  which  he  may  contract  under  the  author- 
ity of  his  license,  and  he  shall  incur  no  penalty  for  so  doing ; 
but  he  shall  do  nothing  as  the  agent  or  representative  of 
any  insurance  company,  nor  shall  any  insurance  company 
be  bound  by  his  acts,  the  true  intent  and  meaning  of  this 
law  being  that  he  shall  act  alone  in  behalf  of  such  persons 
as  may  employ  him  to  procure  insurance  or  to  renew  and 
keep  up  the  same,  to  afford  aid  in  collecting  loss  or  damage 
covered  thereby. 

Sec.  43.  Be  it  further  enacted,  That  every  insurance 
broker  shall  file  with  the  Insurance  Commissioner  annual 
statements,  on  or  before  the  first  day  of  February  in  each 
year.  These  statements  shall  contain  a  full  and  accurate 
report  of  the  condition  on  the  31st  day  of  December  then 
next  preceding  of  each  company  specified  in  the  broker's 
license.  They  shall  be  made  in  such  manner  and  detail 
as  the  Insurance  Commissioner  may  require,  and  shall  be 
sworn  to  by  the  president  and  secretary  of  the  company 
to  which  they  relate.  Failure  to  file  a  statement  within 
due  time  shall  work  a  forfeiture  of  the  broker's  license,  in 
so  far  as  it  relates  to  contracting  with  that  company,  and 
the  Insurance  Commissioner  shall  revoke  and  cancel  it 
accordingly. 

Sec.  44.  Be  it  further  enacted,  That  whenever  any 
licensed  broker  shall  obtain  any  insurance,  he  shall  at 
once  make  to  the  Insurance  Commissioner  a  sworn  state- 
ment of  the  same.  His  books  shall  be  at  all  times  open 
to  the  inspection  of  that  officer,  and  shall  be  produced  and 
shown  to  him  whenever  required.  His  books  shall  set  forth 
the  following  facts :  ( i )  The  exact  amount  of  insurance 
procured  for  each  and  every  person,  giving  the  name  of  the 
person;  (2)  the  gross  premium  charged  thereon;  (3)  the 
name  of  the  insurance  company;  (4)  the  date  and  duration 
of  the  policy. 


—28— 

Sec.  45.  Be  it  further  enacted,  That  each  and  every 
licensed  broker  shall  pay  into  the  treasury  of  this  State  the 
same  tax  on  the  gross  premiums  upon  all  policies  procured 
by  him,  and  in  the  same  manner  and  time  as  insurance  com- 
panies authorized  to  do  business  here  are  required  to  pay; 
and  each  broker,  before  being  licensed,  shall  execute  satis- 
factory bond  to  the  Insurance  Commissioner  in  the  penal 
sum  of  two  thousand  dollars  for  the  faithful  performance 
of  his  duties  and  prompt  payment  of  all  taxes. 

Sec.  46.  Be  it  further  enacted,  That  any  person  who 
shall  do  or  attempt  to  do,  the  kind  of  business  provided 
for  as  insurance  broker  by  this  Act,  without  being  duly 
licensed,  or  who  shall  continue  or  attempt  to  continue  after 
his  license  has  been  forfeited  or  revoked ;  and  any  licensed 
insurance  broker  who,  after  failing  to  comply  with  any  re- 
quirement made  of  him  by  this  Act,  shall  apply  for  or  pro- 
cure, in  behalf  of  any  person  whatever,  any  insurance  on 
property  in  this  State  other  than  his  own,  or  that  in  which 
he  has  some  insurable  interest,  shall  be  guilty  of  a  misde- 
meanor, and,  on  conviction,  shall  be  punished  by  a  fine  of 
not  less  than  one  hundred  dollars,  or  by  imprisonment  in 
the  county  jail  for  not  less  than  thirty  days,  or  both,  in  the 
discretion  of  the  court. 

Sec.  47.  Be  it  further  enacted,  That  before  any  insur- 
ance broker  shall  be  licensed  to  do  business  with  any  insur- 
ance company  not  authorized  to  do  business  in  this  State, 
the  broker  so  applying  for  license  shall  file  with  the  Insur- 
ance Commissioner  a  statement  signed  by  the  president  of 
such  insurance  company,  agreeing,  in  case  any  default  is 
made  in  the  payment  of  any  loss  on  any  policy  issued  by 
such  company  on  property  located  in  this  State,  and  suit 
is  desired  to  be  instituted  by  the  policy  holder  to  force  the 
collection  on  said  policy,  the  company  will  indicate  an  attor- 
ney at  law  to  acknowledge  service  on  any  writ  that  may 
be  filed  in  the  county  of  the  insurer's  residence ;  or,  if  the 
insurer  resides  out  of  the  State,  then  in  the  county  where 
the  loss  occurs,  [to]  collect  the  same,  and  will  submit  itself 
to  the  jurisdiction  of  said  court;  Provided,  hozvever.  That 


—29— 

notice  of  loss  under  any  policy  contemplated  under  this  Act 
shall  be  mailed  by  registered  letter  to  home  office  of  com- 
pany in  which  loss  occurs,  and  in  case  said  company  fails 
to  desginate  its  attorney,  upon  whom  service  shall  be  per- 
fected in  case  suit  on  said  loss  is  brought  within  ten  days 
after  reception  of  said  registered  letter,  then  service  shall 
be  perfected  on  said  company  by  publication,  as  prescribed 
by  the  general  laws  of  the  State,  when  service  by  publica- 
tion is  necessary ;  and  said  company  shall  file  with  the 
Insurance  Commissioner  an  agreement  to  abide  by  and 
accept  said  service  as  final  before  being  allowed  to  place  a 
policy  in  this  State. 

Sec.  48.  Be  it  further  enacted,  That  should  any  com- 
pany have  issued  an  insurance  policy  or  policies  under  this 
Act  fail  to  pay  any  final  judgment  obtained  in  this  State 
upon  any  loss  or  damage  sustained  by  the  insured  within 
thirty  days  after  rendition  thereof,  it  shall  be  the  duty  of  the 
Insurance  Commissioner  to  recall  and  cancel  the  licenses  of 
all  brokers  to  negotiate  and  place  insurance  with  such  com- 
pany on  property  in  this  State.  All  insurance  brokers  doing 
business  in  this  State  under  the  provisions  of  this  Act  shall 
have  printed  in  large  letters  across  the  face  of  each  policy 
the  following  words :  "This  company  has  no  deposit  and 
no  agents  in  Tennessee."  Any  insurance  broker  violating 
this  provision  shall  have  [his]  license  to  do  business  in  this 
State  revoked  by  the  Insurance  Commissioner. 

Sec.  49.  Be  it  further  enacted,  That  Chapter  66  of  the 
Acts  of  1875,  Chapter  108  of  the  Acts  of  1877,  Chapter 
176  of  the  Acts  of  1889,  Chapter  47  of  the  Acts  of  1891, 
and  Chapter  265  of  the  Acts  of  1891,  and  all  other  laws 
or  parts  of  laws  in  conflict  with  this  Act  be  and  the  same 
are  hereby  repealed. 

Sec.  50.     Be  it  further  enacted,  That  this  Act  take  eflfect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  May  11,  1895. 
Approved  May  13,  1895. 


-30— 


ASSESSMENT  LIFE  AND  ACCIDENT 
INSURANCE. 


CHAPTER  127,  ACTS  OF  1897. 

AN  ACT  to  govern  and  regulate  the  business  of  life  and  casualty 
insurance  on  the  assessment  plan,  and  to  repeal  all  laws  or  parts 
of  laws  in  conflict  with  this  Act. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  it  shall  not  be  lawful  for  any 
corporation  transacting  the  business  of  life  and  casualty 
insurance  on  the  assessment  plan,  whether  organized  under 
the  laws  of  this  State  or  of  some  other  State  or  foreign 
country,  to  transact  such  business  in  this  State,  until  it  has 
first  complied  with  the  provisions  of  this  Act,  and  obtained  a 
hcense  from  the  Insurance  Commissioner;  Provided,  hozv- 
cver,  That  nothing  herein  contained  shall  be  construed  as 
applicable  to  organizations  which  conduct  their  business  as 
fraternal  societies  on  the  lodge  plan,  with  representative 
form  of  government,  or  to  purely  fraternal  orders  or  asso- 
ciations which  limit  their  certificate  holders  to  a  particular 
fraternity  or  avocation,  and  which  do  not  employ  paid 
agents  to  solicit  business. 

That  no  life  or  casualty  insurance  company  or  association, 
other  than  fraternal  beneficiary  associations,  tvhich  issues 
contracts,  the  performance  of  ivliich  is  contingent  upon  the 
payment  of  assessments  or  calls  made  upon  its  members, 
shall  do  business  ivithin  this  State  except  such  companies 
or  associations  as  are  noiv  authorised  to  do  business  zvithin 
this  State,  until  it  shall  have  deposited  with  the  Treasurer 
of  this  or  some  other  State  the  sum  of  one  hundred  thousand 
dollars  in  securities  approved  by  the  Insurance  Commis- 
sioner of  this  State  for  the  better  protection  of  its  policy 
holders  [Chapter  450.  Acts  of  1907]. 

Sec.  2.  Be  it  further  enacted.  That  any  corporation  or- 
ganized to  insure  lives  which  provides  for  the  payment  of 


—31— 

policy  claims,  the  accumulation  of  reserve  or  emergency 
funds,  and  the  expenses  of  the  management  and  prosecu- 
tion of  the  business  by  payments  to  be  made  either  at  periods 
named  in  the  contract,  or  upon  assessments  as  required  by 
persons  holding  similar  contracts,  and  wherein  the  insured's 
liability  to  contribute  to  the  payment  of  policy  claims, 
accrued  or  to  accrue,  is  not  limited  to  a  fixed  sum  shall  be 
deemed  to  be  engaged  in  the  business  of  life  insurance  on  the 
assessment  plan.  Any  corporation  organized  to  insure 
against  the  contingency  of  death  or  other  physical  disability 
of  the  assured  thereunder,  resulting  from  accidental  injury, 
and  which  provides  for  the  payment  of  policy  claims,  the 
accumulation  of  reserve  or  emergency  funds,  and  the  ex- 
penses of  the  management  and  prosecution  of  the  business 
by  payments  to  be  made  either  at  periods  named  in  the 
contract,  or  upon  assessments  as  required  by  persons  hold- 
ing similar  contracts,  and  wherein  the  insured's  liability  to 
contribute  to  the  payment  of  benefits,  accrued  or  to  accrue, 
is  not  limited  to  a  fixed  sum,  shall  be  deemed  to  be  engaged 
in  the  business  of  casualty  or  accident  insurance  on  the 
assessment  plan. 

Sec.  3.  Be  it  further  enacted,  That  any  corporation  or- 
ganized under  the  laws  of  this  State  for  the  purpose  of 
transacting  the  business  of  life  or  accident  insurance  on 
the  assessment  plan,  shall,  before  commencing  the  trans- 
action of  business,  file  with  the  Insurance  Commissioner 
a  properly  certified  copy  of  its  charter,  shall  satisfy  the 
Insurance  Commissioner  by  such  evidence  as  he  sees  fit 
to  make  and  require,  that  it  has  secured  applications  for 
not  less  than  $1,000,000  [Chapter  574,  Acts  of  1903]  insur- 
ance by  not  less  than  three  hundred  persons,  and  that  two 
per  centum,  if  a  life  corporation,  and  one  per  centum  if  an 
accident  corporation,  of  the  insurance  applied  for  has  been 
deposited  in  bank  to  the  credit  of  the  mortuary  guarantee, 
or  disability  fund  of  the  corporation,  and  a  copy  of  the 
policy  or  certificate  it  proposes  to  issue,  with  application 
and  by-laws,  which  must  show  that  the  insured's  liability  to 
contribute  to  the  payment  of  benefits  is  not  limited  to  the 


—32— 

payment  of  a  fixed  periodical  sum.  Upon  a  compliance 
with  the  provisions  of  this  section  and  other  parts  of  this 
Act  applicable  thereto,  it  shall  be  the  duty  of  the  Insurance 
Commissioner  to  issue  to  such  corporation  a  license,  which 
shall  extend  to  the  end  of  the  calendar  year,  and  be  subject 
to  renewal  from  year  to  year  upon  compliance  with  the  pro- 
visions prescribed  in  this  Act. 

Sec.  4.  Be  it  further  enacted,  That  any  corporation  or- 
ganized under  authority  of  another  State  or  government  to 
issue,  or  which  is  engaged  in  the  business  of  issuing  policies 
or  certificates  of  life  or  accident  insurance  on  the  assess- 
ment plan,  as  a  condition  precedent  to  the  transaction  of 
business  in  this  State,  shall  deposit  with  the  Insurance  Com- 
missioner a  certified  copy  of  its  charter  or  articles  of  incor- 
poration a  statement,  under  oath,  of  its  president  and  sec- 
retary, in  the  form  by  the  Insurance  Commissioner  required, 
of  its  business  for  the  preceding  year;  a  certificate  under 
oath  of  its  president  and  secretary,  that  it  is  paying,  and  for 
the  twelve  months  then  next  preceding,  has  paid  the  maxi- 
mum amounts  named  in  its  policies  or  certificate  in  full,  a 
certificate  from  the  proper  authority  of  its  home  State  that 
corporations  of  this  State  engaged  according  to  the  provi- 
sions of  this  Act  in  life  or  accident  insurance  on  the  assess- 
ment plan  are  legally  entitled  to  do  business  in  such  State, 
a  copy  of  its  policy  or  certificate,  with  application  and  by- 
laws, which  must  show  that  the  insured's  liability  to  con- 
tribute to  the  payment  of  benefits  is  not  limited  to  the  pay- 
ment of  a  fixed  periodical  sum  ;  evidence  satisfactory  to  the 
Insurance  Commissioner  that  the  corporation  accumulates 
and  maintains  assets  in  excess  of  liabilities  other  than  capital 
stock,  equal  to  tii^'O  per  cent,  of  all  instirance  said  corpora- 
tion has  in  force,  and  the  amount  of  instirance  in  force  shall 
not  be  less  than  that  required  of  similar  corporations  of  this 
State  [Chapter  574,  Acts  of  1903],  and  that  such  accumula- 
tion is  permitted  by  law,  and  is  for  the  benefit  of  policy  and 
certificate  holders  only,  and  is  invested  in  acceptable  securi- 
ties. Upon  a  compliance  with  the  provisions  of  this  section 
and  other  parts  of  this  Act  applicable  thereto,  it  shall  be  the 


—33— 

duty  of  the  Insurance  Commissioner  to  issue  to  such  cor- 
poration a  license,  which  shall  extend  to  the  end  of  the 
calendar  year,  and  be  subject  to  renewal  from  year  to  year 
upon  compliance  with  the  provisions  prescribed  in  this 
Act. 

Sec.  5.  Be  it  further  enacted,  That  every  corporation 
organized  under  the  laws  of  another  State  or  foreign  coun- 
try, and  transacting  the  business  of  life  or  accident  insur- 
ance on  the  assessment  plan,  shall,  before  doing  business 
in  this  State,  appoint  in  writing,  the  Insurance  Commis- 
sioner or  successor  in  office,  to  be  its  true  and  lawful  at- 
torney, upon  whom  all  process  in  any  action  or  proceeding 
against  it  may  be  served,  and  in  such  writing,  shall  agree 
that  any  lawful  process  against  it  which  is  served  on  said 
attorney,  shall  be  of  the  same  legal  force  and  validity  as  if 
served  on  the  corporation,  and  that  the  authority  shall  con- 
tinue in  force  so  long  as  any  liability  remains  outstanding 
against  the  corporation  in  this  State.  Service  upon  such 
attorney  shall  be  deemed  sufficient  service  upon  the  prin- 
cipal ;  when  legal  process  against  any  such  corporation  is 
served  upon  the  Insurance  Commissioner,  he  shall  imme- 
diately notify  the  corporation  of  such  service,  by  registered 
letter. 

Sec.  6.  Be  it  further  enacted,  That  every  corporation 
transacting  the  business  of  life  insurance  on  the  assessment 
plan,  and  doing  business  under  the  provisions  of  this  Act, 
shall  accumulate  and  maintain  a  reserve  or  emergency  fund 
equal  to  such  sum  as  might  be  realized  from  one  assess- 
ment on,  or  periodical  payment  by  policy,  or  certificate 
holders  thereof,  and  in  no  event  less  than  the  amount  of  its 
maximum  policy  or  certificate.  In  case  such  funds,  or  any 
portion  thereof,  shall  have  been  used  by  the  corporation  for 
the  purpose  or  purposes  for  which  the  same  was  created 
or  accumulated,  and  the  amount  thereof  reduced  to  less 
than  the  amount  of  one  death  assessment  or  periodical  pay- 
ment, the  amount  of  such  reduction  below  the  amount  of 
one  death  assessment,  or  periodical  payment,  shall  be  made 
3 


—34— 

up  and  restored  to  such  fund  within  six  months  thereafter ; 
such  fund  may  be  held  in  cash,  or  invested  in  the  same 
class  of  securities  required  by  law  for  the  investment  of 
funds  by  insurance  corporations,  and  nothing  herem  con- 
tained shall  prevent  the  accumulation  of  other  funds  in 
excess  of  the  amount  herein  required,  to  provide  for  the 
purposes  of  such  corporation.  If  such  fund  is  in  excess  of 
the  amount  of  one  death  assessment  or  periodical  payment 
by  all  policy  or  certificate  holders,  and  not  less  than  the 
sum  of  $50,000,  the  excess  of  any  portion  thereof,  may  be 
used  in  the  reduction  of  assessments  or  periodical  payments 
by  certificate  or  policy  holders  by  ratable  cash  dividends 
or  credits,  or  in  such  other  equitable  division  or  appoint- 
ment [apportionment]  thereof  as  the  rules  or  contracts  of 
the  corporation  may  provide.  Corporations  organized  under 
the  laws  of  this  State  at  the  time  of  the  passage  of  this  Act 
may  have  six  months  from  the  date  hereof,  in  which  to  ac- 
cumulate the  reserve  or  emergency  fund  herein  required, 
and  corporations  hereafter  organized  under  the  laws  of  this 
State,  may  have  six  months  from  the  date  of  organization  in 
which  to  accumulate  such  funds. 

Sec.  7.  Be  it  further  enacted,  That  every  corporation 
transacting  the  business  of  accident  insurance  on  the  assess- 
ment plan,  and  doing  business  under  the  provisions  of  this 
Act,  shall  accumulate  and  maintain  a  reserve  or  emergency 
fund  of  at  least  $5,000,  and  every  such  corporation  shall 
add  to  such  emergency  fund  thereafter  two  and  one-half 
per  cent,  of  the  amount  realized  from  every  premium  assess- 
ment or  periodical  call  until  such  fund  shall  be  equal  to  the 
amount  of  two  dollars  for  every  $5,000  of  insurance  in 
force ;  such  emergency  fund  or  any  part  thereof  may  be 
used  for  the  payment  of  death  and  indemnity  claims ;  Pro- 
vided, That  if  the  amount  of  such  funds  be  thereby  reduced 
below  the  amount  contemplated  by  this  Act,  the  amount  by 
which  such  fund  is  reduced  be  made  up  and'  restored 
within  six  months  thereafter ;  such  fund  may  be  held  in 
cash  or  invested  in  the  same  class  of  securities  required  by 
law  for  the  investment  of  funds  by  insurance  corporations, 


—35— 

and  nothing  herein  contained  shall  prevent  the  creation  and 
accumulation  of  other  funds  in  excess  of  the  amount  herein 
required  to  provide  for  the  purposes  of  such  corporation. 
Corporations  organized  under  the  laws  of  this  State  at  the 
time  of  the  passage  of  this  Act  may  have  six  months  from 
the  date  hereof  in  which  to  accumulate  such  reserve  or 
emergency  fund,  and  corporations  hereafter  organized  un- 
der the  laws  of  this  State  may  have  six  months  from  the 
date  of  organization  in  which  to  accumulate  such  funds. 

Sec.  8.  Be  it  further  enacted,  That  no  corporation  trans- 
acting the  business  of  life  insurance  on  the  assessment  plan, 
under  the  provisions  of  this  Act,  shall  issue  a  certificate  or 
policy  upon  the  life  of  any  person  less  than  fifteen  or  more 
than  sixty-five  years  of  age,  excepting  in  case  of  transfer 
of  policy  holders,  as  provided  herein,  nor  upon  a  life  in 
which  the  beneficiary  named  has  no  insurable  interest,  nor 
as  an  endowment  to  any  insured  person  while  living,  and 
every  call  for  payments  by  the  policy  or  certificate  holders 
shall  distinctly  state  the  purposes  of  the  same,  nor  shall 
any  such  corporation  make  or  permit  any  distinction  or 
discrimination  between  insurants  of  the  same  class  and 
equal  expectation  of  life  in  the  amount  of  premium  pay- 
ments or  assessments  for  policies  or  certificates  of  life  in- 
surance, or  in  the  dividends  or  other  benefits  payable 
thereon.  Any  assignment  of  a  policy  or  certificate  to  a  per- 
son have  no  insurable  interest  in  the  insured's  life,  shall 
render  such  policy  or  certificate  void.  Provided,  That  the 
age  limit  fixed  in  this  section  shall  not  apply  to  associations 
or  companies  doing  business  under  this  Act  on  the  indus- 
trial or  zveekiy  payment  plan  of  insurance;  provided  such 
company  shall  not  write  more  than  tzvelve  [12]  dollars  of 
insurance  on  children  two  years  old  and  under,  and  on  chil- 
dren between  two  and  ten  years,  not  more  than  $25,  and  on 
children  under  eighteen  years,  $50  [Chapter  164,  Acts  of 
1901]. 

Sec.  9.  Be  it  further  enacted,  That  every  policy  or  cer- 
tificate hereafter  issued  by  any  corporation  doing  business 
under  the  provisions  of  this  Act,  and  promising  payment 


-36- 

to  be  made  upon  a  contingency  of  death  or  physical  dis- 
ability, shall  specify  the  sum  of  money  which  it  promises 
to  pav  under  such  contingency,  and  the  number  of  days 
after  satisfactory  proof  of  the  happening  thereof  on  which 
such  payment  shall  be  made.  Upon  the  occurrence  of  such 
contingency,  unless  the  contract  shall  have  been  voided  by 
fraud,  or  by  breach  of  its  conditions,  the  corporation  shall 
be  obligated  to  the  beneficiary  for  such  payment  at  the 
time  and  to  the  amount  specified  in  the  policy  or  certificate. 
If  such  corporation  shall  refuse  or  fail  to  make  such  pay- 
ment after  final  judgment  has  been  obtained  upon  such 
claim,  the  Insurance  Commissioner  shall  notify  the  corpora- 
tion not  to  issue  any  new  policies  or  certificates  until  such 
indebtedness  is  fully  paid,  and  no  officer  or  agent  of  the  cor- 
poration shall  make,  sign,  or  issue  any  policy  or  certificate 
of  insurance  while  such  notice  is  in  force. 

Sec.  io.  Be  it  further  enacted,  That  no  corporation  or- 
ganized under  the  laws  of  this  State  and  doing  business 
under  the  provisions  of  this  Act  shall  transfer  its  risks  to, 
or  reinsure  them  in  any  other  corporation,  unless  the  con- 
tract of  transfer  or  reinsurance  is  first  submitted  to  and 
approved  by  a  two-thirds  vote  of  the  meeting  of  the  in- 
sured, called  to  consider  the  same,  of  which  meeting  a 
written  or  printed  notice  shall  be  mailed  to  each  member, 
certificate  or  policy  holder,  at  least  thirty  days  before  the 
day  fixed  for  such  meeting.  If  such  transfer  or  reinsurance 
shall  be  approved,  every  member,  certificate  or  policy 
holder  of  the  corporation,  who  shall  file  with  the  Secretary 
thereof,  within  ten  days  after  the  meeting,  a  written  notice 
of  his  preference  to  be  transferred  to  some  other  corpora- 
tion than  that  named  in  the  contract,  shall  be  accorded  all 
the  rights  and  privileges,  if  any,  in  aid  of  such  transfer  as 
would  have  been  accorded  under  the  terms  of  such  con- 
tract had  he  been  transferred  to  the  corporation  named 
therein.  No  such  corporation  organized  under  the  laws  of 
this  State  shall  transfer  its  risks  or  assets,  or  any  part 
thereof,  to,  or  reinsure  its  risks  or  any  part  thereof,  in  any 
insurance  corporation  of  any  other  State  or  county  which 


—37— 

is  not,  at  the  time  of  such  transfer  or  reinsurance,  author- 
ized to  do  business  in  this  State  under  the  laws  thereof. 
Nothing  herein  contained  shall  prevent  the  officers  of  any 
corporation  from  reinsuring  a  portion  of  individual  risks  in 
other  corporations  authorized  to  transact  business  in  the 
State. 

Sec.  II.  Be  it  further  enacted,  That  every  corporation 
doing  business  under  the  provisions  of  this  Act  shall,  on 
or  before  the  first  day  of  February  in  each  year,  make  and 
file  with  the  Insurance  Commissioner,  a  report  of  its  aflfairs 
and  operations  during  the  year  ending  on  the  31st  day  of 
December,  immediately  preceding,  which  report  shall  be 
in  such  form  and  verified  by  such  officers  as  the  Insurance 
Commissioner  may  require ;  Provided,  That  the  Insurance 
Commissioner  may,  for  good  cause  shown,  extend  the  time 
for  filing  such  report  to  a  date  not  later  than  March  i.  The 
Insurance  Commissioner  shall  cause  an  abstract  of  such 
report  to  be  published  in  his  annual  report.  Any  corpora- 
tion refusing  or  neglecting  to  make  such  report,  or  to  make 
payment  of  any  of  the  fees  required  by  law,  shall,  upon  the 
order  of  the  Insurance  Commissioner,  cease  to  do  business 
in  this  State  until  such  report  and  payment  be  made,  and 
until  it  shall  have,  in  addition,  paid  a  penalty  of  $25  for 
each  day  neglected. 

Sec.  12.  Be  it  further  enacted,  That  every  corporation 
transacting  business  under  the  provisions  of  this  Act  shall 
obtain  from  the  Insurance  Commissioner  a  certificate  of 
authority  for  each  agent  writing  or  soliciting  insurance  for 
it  in  this  State,  which  certificate  shall  show  that  such  cor- 
poration has  complied  with  the  provisions  of  this  Act,  and 
such  certificate,  unless  sooner  revoked,  shall  expire  with 
the  end  of  each  calendar  year,  and  be  renewed  within  thirty 
days  thereafter.  Any  corporation  that  shall  neglect  or  fail 
to  make  application  for  certificates  of  authority  for  its 
agents  or  any  one  of  its  agents,  and  any  agent  who  shall 
transact  any  business  for  such  corporation  without  first  re- 
ceiving the  certificate  herein  required,  shall  be  liable  to  a 
fine  of  $100. 


-38- 

Sec.  13.  Be  it  further  enacted,  That  all  corporations 
organized  under  the  laws  of  this  State  to  which  this  Act 
is  applicable,  with  their  books,  papers  and  vouchers,  shall 
be  subject  to  visitation  and  inspection  by  the  Insurance 
Commissioner  or  such  person  as  he  may  designate.  The 
Insurance  Commissioner  may  address  any  inquiries  to  such 
corporation  in  relation  to  its  doings  or  condition  or  any 
other  matter  connected  with  its  transactions  relative  to  the 
business  contemplated  by  this  Act.  All  officers  of  such  cor- 
poration shall  promptly  reply  in  writing  to  all  such  inquiries 
under  oath  of  its  president,  secretary  or  other  officers,  if 
required.  When  the  Insurance  Commissioner,  on  investiga- 
tion, shall  be  satisfied  that  any  corporation  organized  under 
the  laws  of  this  State,  and  doing  business  under  the  provi- 
sions of  this  Act.  is  insolvent  because  of  matured  death 
claims  or  other  obligations  due  and  unpaid  exceeding  its 
assets  and  death  assessments  or  periodical  payments  called 
or  in  process  of  collection,  or  has  exceeded  its  powers, 
failed  to  comply  with  any  provision  of  law,  or  is  not  carry- 
ing out  its  contracts  with  members  in  good  faith,  he  shall 
report  the  facts  to  the  Attorney-General  of  the  State,  who, 
if  he  shall  be  of  the  opinion  that  the  facts  require  such 
action,  may  thereupon  apply  to  any  court  having  jurisdic- 
tion thereof  for  an  order  requiring  the  officers  of  such  cor- 
poration to  show  cause  within  a  reasonable  time  why  such 
corporation  should  not  be  restrained  from  continuing  to 
transact  business.  Such  court  may,  in  its  discretion,  appoint 
agents  or  receivers  to  take  charge  of  the  effects  and  wind 
up  the  business  of  the  corporation,  subject  to  such  rules 
and  orders  as  the  court  may  from  time  to  time  prescribe, 
according  to  the  course  of  proceedings  in  equity,  or  the 
court  may,  if  it  deems  that  the  best  interests  of  the  corpora- 
tion will  be  served  thereby,  decree  a  removal  from  office  of 
the  officers  or  any  number  thereof,  and  substitute  suitable 
persons  to  serve  until  the  regular  annual  election,  or  until 
a  successor  is  regularly  chosen. 

Sec.  14.  Be  it  further  enacted,  That  all  corporations 
organized  under  the  laws  of  another  State  or  country,  and 


—39— 

doing  business  under  the  provisions  of  this  Act,  with  their 
books,  papers,  and  vouchers,  shall  be  subject  to  visitation 
and  inspection  by  the  Insurance  Commissioner  or  such  per- 
son as  he  may  designate.  The  Insurance  Commissioner 
may  address  any  inquiries  to  such  corporation  in  relation  to 
its  doings  or  condition,  or  any  other  matter  connected  with 
its  transactions  relative  to  the  business  contemplated  by 
this  Act.  All  officers  of  such  corporation  shall  promptly 
reply  to  such  inquiries  under  oath  of  its  president,  secre- 
tary or  other  officers,  if  required.  When  the  Insurance 
Commissioner  shall  be  satisfied,  on  investigation,  that  any 
corporation  organized  under  the  laws  of  another  State  or 
country,  and  doing  business  under  the  provisions  of  this 
Act,  is  insolvent  because  of  matured  death  claims  or  other 
obligations  due  and  unpaid  exceeding  its  assets,  and  death 
assessments  or  periodical  payments  called  or  in  process  of 
collection,  or  has  exceeded  its  powers,  failed  to  comply  with 
any  provision  of  law,  or  is  not  carrying  out  its  contract  with 
members  in  good  faith,  he  may  revoke  the  authority  of  such 
corporation  to  do  business  in  this  State,  and  cause  a  notice 
thereof  to  be  published  in  one  or  more  newspapers  of  gen- 
eral circulation ;  and  thereafter  such  corporation  shall  cease 
to  transact  any  new  business  in  this  State,  while  such  re- 
vocation is  in  force ;  Provided,  hozvever,  That  unless  the 
grounds  for  revocation  relate  to  the  insolvency  of  the  cor- 
poration, he  shall  give  it  ten  days  notice  as  to  such  revoca- 
tion, specifying  wherein  such  corporation  has  failed  to  com- 
ply with  any  provision  of  law,  or  has  exceeded  its  powers, 
or  is  not  carrying  out  its  contract  with  members  in  good 
faith. 

Sec.  15.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  collect  and  pay  into  the  treasury  the  follow- 
ing fees :  For  each  corporation  filing  preliminary  papers 
and  receiving  license,  $25 ;  for  each  corporation's  annual 
statement,  $15 ;  for  each  certificate  to  an  agent  or  renewal 
thereof,  $2.  The  necessary  expenses  of  any  visitation  or 
examination  made  under  the  provisions  of  this  Act,  shall 
be  paid  by  the  corporation  visited  or  examined,  and  in  no 


— 40— 

case  shall  the  Insurance  Commissioner  or  his  deputy  be  paid 
more  than  actual  expenses. 

Sec.  i6.  Be  it  further  enacted,  That  any  officer  of  a 
corporation  subject  to  the  provisions  of  this  Act,  and  any 
person  or  agent  representing  such  corporation  who  shall 
transact,  or  attempt  to  transact  in  any  manner  whatever, 
any  business  in  this  State  until  such  corporation  has  com- 
plied with  the  provisions  of  this  Act,  shall  be  deemed  guilty 
of  a  misdemeanor,  and,  on  conviction,  shall  be  fined  not  less 
than  two  hundred  ($200)  dollars,  or  imprisoned  not  more 
tha*'  sixty  [days],  or  both,  in  the  discretion  of  the  court. 

IbtC.  17.  Be  it  further  enacted,  That  every  corporation 
transacting  business  under  the  provisions  of  this  Act  shall, 
in  addition  to  the  requirements  contained  herein,  pay  such 
tax  as  may  be  assessed  or  levied  against  such  corporation 
by  any  law  of  this  State. 

Sec.  18.  Be  it  further  enacted,  That  the  business  of 
assessment  life  or  accident  insurance,  as  provided  for  and 
permitted  by  this  Act  shall  only  be  carried  on  by  duly  or- 
ganized corporations. 

Sec.  19.  Be  it  further  enacted.  That  Chapter  179  of 
the  Acts  of  1887,  entitled  "An  Act  to  amend  the  law  estab- 
lishing a  bureau  of  insurance,  and  to  regulate  the  business 
of  mutual  or  assessment  insurance  in  the  State  of  Tennes- 
see," and  all  other  laws  or  parts  of  laws  in  conflict  with  the 
provisions  of  this  Act,  be  and  the  same  are  hereby  repealed. 

Sec.  20.     Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  3,  1897. 
Approved  April  10,  1897. 


—41— 


STANDARD  PROVISIONS  OF  LIFE 
INSURANCE  POLICIES. 


CHAPTER  457,  ACTS  OF  1967. 

A  BILL  to  be  entitled  An  Act  establishing  standard  pro- 
visions and  conditions  to  be  contained  in  policies  of  life 
insurance  issued  by  companies  organized  under  the  laws 
of  this  State  and  companies  licensed  to  do  business  in 
this  State. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  no  policy  of  life  insurance 
shall  be  issued  in  this  State,  or  be  issued  by  a  life  insurance 
company  organized  under  the  laws  of  this  State  unless  the 
same  shall  contain  the  following  provisions : 

(i)  A  provision  that  all  premiums  shall  be  payable  in 
advance,  either  at  the  home  office  of  the  company  or  to  an 
agent  of  the  company,  upon  delivery  of  a  receipt  signed 
by  one  or  more  of  the  officers  who  shall  be  named  in  the 
policy. 

(2)  A  provision  for  a  grace  of  one  month  for  the  pay- 
ment of  every  premium  after  the  first  year,  which  may  be 
subject  to  an  interest  charge,  during  which  month  the 
insurance  shall  continue  in  force,  which  provision  may  con- 
tain a  stipulation  that  if  the  insured  shall  die  during  the 
month  of  grace  the  overdue  premium  will  be  deducted  in 
any  settlement  under  the  policy. 

(3)  A  provision  that  the  policy  shall  constitute  the  en- 
tire contract  between  the  parties  and  shall  be  incontestable 
after  two  years  from  its  date,  except  for  non-payment  of 
premiums  and  except  for  violations  of  the  conditions  of  the 
policy  relating  to  naval  and  military  services  in  time  of  war. 

(4)  A    provision    that    all    statements   made   by   the    in- 


—42— 

sured  shall,  in  the  absence  of  fraud,  be  deemed  representa- 
tions and  not  warranties,  and  that  no  such  statement  shall 
avoid  the  policy  unless  it  is  contained  in  a  written  applica- 
tion, and  a  copy  of  such  application  shall  be  endorsed  upon 
or  attached  to  the  policy  when  issued. 

(5)  A  provision  that  if  the  age  of  the  insured  is  under- 
stated the  amount  payable  under  the  policy  shall  be  such 
as  the  premium  would  have  purchased  at  the  correct  age. 

(6)  A  provision  that  the  policy  shall  participate  in  the 
surplus  of  the  company,  and  that,  beginning  not  later  than 
the  end  of  the  fifth  policy  year,  the  company  will  determine 
and  account  for  the  portion  of  the  divisible  surplus  accru- 
ing on  the  policy,  and  that  the  owner  of  the  policy  shall 
have  the  right  to  have  the  current  dividend  arising  from 
such  participation  paid  in  cash,  and  that  at  periods  of  not 
more  than  five  years  such  accounting  and  payment  at  the 
option  of  the  policyholder  shall  be  had. 

This  provision  shall  not  be  required  in  non-participating 
policies. 

(7)  A  provision  that  after  three  full  years  premiums 
have  been  paid  the  company  at  any  time,  while  the  policy 
is  in  force,  will  advance,  on  proper  assignment  of  the  policy 
and  on  the  sole  security  thereof,  at  a  specified  rate  of  in- 
terest, a  sum  equal  to,  or  at  the  option  of  the  owner  of  the 
policy,  less  than  the  reserve  at  the  end  of  the  current  policy 
year  on  the  policy  and  on  any  dividend  additions  thereto, 
specifying  the  mortality  table  and  rate  of  interest  adopted 
for  computing  such  reserve,  less  a  sum  not  more  than  two 
and  one-half  per  centum  of  the  amount  insured  by  the 
policy  and  of  any  dividend  additions  thereto ;  and  that  the 
company  will  deduct  from  such  loan  value  any  existing  in- 
debtedness on  the  policy  and  any  unpaid  balance  of  the 
premium  for  the  current  policy  year,  and  may  collect  inter- 
est in  advance  on  the  loan  to  the  end  of  the  current  policy 
year  which  provision  may  further  provide  that  such  loan 
may  be  deferred  for  not  exceeding  six  months  after  the 
application  therefor  is  made.  It  shall  be  further  stipulated 
in  the  policy  that  failure  to  repay  any  such  advance  or  to 


—43— 

pay  interest  shall  not  avoid  the  policy  unless  the  total  in- 
debtedness thereon  to  the  company  shall  equal  or  exceed 
such  loan  value  at  the  time  of  such  failure,  nor  until  one 
month  after  notice  shall  have  been  mailed  by  the  company 
to  the  last  known  address  of  the  insured  and  of  the  assignee, 
if  any. 

No  condition  other  than  as  herein  provided  shall  be  ex- 
acted as  a  prerequisite  to  any  such  advance. 

This  provision  shall  not  be  required  in  term  insurances. 

(8)  A  provision  which,  in  event  of  default  in  premium 
payments,  after  premiums  shall  have  been  paid  for  three 
years,  shall  secure  to  the  owner  of  the  policy  a  stipulated 
form  of  insurance,  the  net  value  of  which  shall  be  at  least 
equal  to  the  reserve  at  the  date  of  default  on  the  policy 
and  on  any  dividend  additions  thereto,  specifying  the  mor- 
tality table  and  rate  of  interest  adopted  for  computing  such 
reserves,  less  a  sum  not  more  than  two  and  one-half  per 
centum  of  the  amount  insured  by  the  policy  and  of  any 
existing  dividend  additions  thereto,  and  less  any  existing 
indebtedness  to  the  company  on  the  policy.  Such  provision 
shall  stipulate  that  the  policy  may  be  surrendered  to  the 
company  at  its  home  office  within  one  month  from  date  of 
default  for  a  specified  cash  value  at  least  equal  to  the  sum 
which  would  otherwise  be  available  for  the  purchase  of 
insurance  as  aforesaid,  and  may  stipulate  that  the  company 
may  defer  payment  for  not  more  than  six  (6)  months  after 
the  application  therefor  is  made. 

This  provision  shall  not  be  required  in  term  insurances 
of  twenty  years  or  less. 

(9)  A  table  showing  in  figures  the  loan  values  and  the 
options  available  under  the  policies  each  year  upon  default 
in  premium  payments  during  at  least  the  first  twenty  years 
of  the  policy,  beginning  with  the  year  in  which  such  values 
and  options  become  available, 

(10)  A  provision  that  if,  in  event  of  default  in  premium 
payments,  the  value  of  the  policy  shall  be  applied  to  the 
purchase  of  other   insurance,   and   if   such   insurance   shall 


—44— 

be  in  force  and  the  original  policy  shall  not  have  been  sur- 
rendered to  the  company  and  canceled,  the  policy  may  be 
reinstated  within  three  years  from  such  default  upon  evi- 
dence of  insurability  satisfactory  to  the  company  and  pay- 
ment of  arrears  of  premiums  with  interest. 

( 1 1 )  A  provision  that  when  a  policy  shall  become  a 
claim  by  the  death  of  the  insured,  settlement  shall  be  made 
upon  receipt  of  due  proof  of  death,  or  not  later  than  two 
months  after  receipt  of  such  proof. 

(12)  A  table  showing  the  amounts  of  installments  in 
which  the  policy  may  provide  its  proceeds  may  be  payable. 

(13)  A  title  on  the  face  and  on  the  back  of  the  policy 
correctly  describing  the  same. 

Any  of  the  foregoing  provisions  or  portions  thereof  relat- 
ing to  premiums  not  applicable  to  single  premium  policies 
shall  to  that  extent  not  be  incorporated  therein. 

Sec.  2,  Be  it  further  enacted.  That  no  policy  of  life  insur- 
ance* in  form  other  than  as  prescribed  in  Section  i  shall  be 
issued  or  delivered  in  this  State  or  be  issued  by  a  life  insur- 
ance company  organized  under  the  laws  of  this  State,  if  it 
contain  any  of  the  following  provisions : 

(i)  A  provision  for  forfeiture  of  the  policy  for  failure 
to  repay  any  loan  on  the  policy  or  to  pay  interest  on  such 
loan  while  the  total  indebtedness  on  the  policy  is  less  than 
the  loan  value  thereof,  or  any  provision  for  forfeiture  for 
failure  to  repay  any  such  loan  or  to  pay  interest  thereon, 
unless  such  provision  contain  a  stipulation  that  np  such  for- 
feiture shall  occur  until  at  least  one  month  after  notice  shall 
have  been  mailed  by  the  company  to  the  last  known  address 
of  the  insured  and  of  the  assignee,  if  any;  or  a  provision 
contemplating  any  proposed  benefit  not  essentially  a  part  of 
the  insurance  contract  or  any  connection  of  the  assured 
with  the  company  other  than  that  of  policyholder. 

(2)  A  provision  limiting  the  time  within  which  any  action 
at  law  or  in  equity  may  be  commenced  to  less  than  five  years 
after  the  cause  of  action  shall  accrue. 


♦Words  in  italics  should  have  been  omitted  in  amendment  to  original  bill. 


—45— 

(3)  A  provision  by  which  the  policy  shall  purport  to  be 
issued  or  to  take  effect  before  the  original  application  for 
insurance  was  made,  if  thereby  the  insured  would  rate  at 
an  age  younger  than  his  age  at  date  when  the  application 
was  made,  according  to  his  age  at  last  birthday. 

(4)  A  provision  for  any  mode  of  settlement  at  maturity 
of  less  value  than  the  amount  insured  by  the  policy,  plus 
dividend  additions,  if  any,  less  any  indebtedness  to  the  com- 
pany on  the  policy  and  less  any  premium  that  may  by  the 
terms  of  the  policy  be  deducted,  payments  to  be  made  in 
accordance  with  the  terms  of  the  policy. 

Sec.  3.  Be  it  further  enacted.  That  policies  may  be 
issued  in  this  State  providing  for  not  more  than  one  year 
preliminary  term  insurance  by  the  incorporation  therein  of 
a  clause  on  the  face  of  the  policy  distinctly  specifying  that 
the  first  year's  insurance  is  term  insurance. 

If  the  premium  charged  for  term  insurance  under  a 
limited  payment  life  or  endowment  preliminary  term  policy 
providing  for  the  payment  of  all  premiums  thereon  in  less 
than  twenty  years  from  the  date  of  the  policy,  exceeds  that 
charged  for  like  insurance  under  twenty  pay  life  preliminary 
term  policies  of  the  same  company  at  the  same  age,  the 
reserve  thereon  at  the  end  of  any  year,  including  the  first, 
shall  not  be  less  than  the  reserve  on  a  twenty  pay  life  pre- 
liminary term  policy  issued  in  the  same  year  and  at  the 
same  age,  together  with  an  amount  which  shall  be  equivalent 
to  the  accumulation  of  a  net  level  premium  sufficient  to  pro- 
vide for  a  pure  endowment  at  the  end  of  the  premium  pay- 
ment period  equal  to  the  difference  between  the  value  at 
the  end  of  such  period  for  such  twenty  pay  life  preliminary 
term  policy  and  the  full  reserve  at  such  time  of  such  a 
limited  payment  life  or  endowment  policy ;  provided  this 
shall  not  take  effect  until  January  i,  1908. 

Sec.  4.  Be  it  further  enacted.  That  no  policy  of  life  in- 
surance shall  be  issued  or  delivered  in  this  State,  or  be  issued 
by  a  life  insurance  company  organized  under  the  laws  of  this 
State,  until  the  form  of  the  same  has  been  filed  with  the  In- 
surance Commissioner  and  after  the  Insurance  Commission- 


-46- 

er  shall  have  notified  any  company  of  his  disapproval  of  any 
form,  it  shall  be  unlawful  for  such  company  to  issue  any  pol- 
icy in  the  form  so  disapproved.  The  Commissioner's  action 
shall  be  subject  to  review  by  any  court  of  competent  juris- 
diction. 

Sec.  5.  Be  it  further  enacted,  That  the  policies  of  a  life 
insurance  company,  not  organized  under  the  laws  of  this 
State,  may,  if  approved  by  the  Insurance  Commissioner  of 
this  State,  contain  any  provision  which  the  law  of  the 
State,  Territory,  District  or  Country  under  which  the  com- 
pany is  organized  prescribes  shall  be  in  such  policies  when 
issued  in  this  State,  and  the  policies  of  a  life  insurance  com- 
pany organized  under  the  laws  of  this  State  may,  when  is- 
sued or  delivered  in  any  other  State,  Territory,  District  or 
Country,  contain  any  provision  required  by  the  laws  of  the 
State,  Territory,  District  or  Country  in  which  the  same  are 
issued,  anything  in  this  Act  to  the  contrary  notwithstanding. 

Sec,  6.  Be  it  further  enacted.  That  this  Act  shall  not 
apply  to  annuities,  industrial  policies,  or  to  corporations  or 
associations  operating  on  the  assessment  or  fraternal  plan. 

Sec.  7.  Be  it  further  enacted.  That  wherever  the  word 
"company"  is  used  in  this  Act,  it  shall  be  held  to  include 
corporations  and  associations. 

Sec.  8.  Be  it  further  enacted.  That  this  Act  shall  take 
effect  from  and  after  January  i,  1908,  the  public  welfare 
requiring  it. 

Passed  April  10,  1907. 

Approved  April  15,  1907. 


—47— 


SURPLUS  APPORTIONMENT  AND  AC- 
COUNTING OF  LIFE  INSUR- 
ANCE COMPANIES. 


CHAPTER  454,  ACTS  OF  1907. 

AN  ACT  to  require  Life  Insurance  Companies  operating 
on  the  mutual  plan  to  make  at  fixed  periods  an  appor- 
tionment and  accounting  of  surplus  on  all  policies  here- 
after issued  on  the  participating  plan,  and  to  charge  as 
a  liability  such  apportionments  when  left  with  the  Com- 
pany. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee^  That  every  life  insurance  company  do- 
ing business  in  this  State,  operated  on  the  mutual  plan  or  [a 
plan]  in  which  policyholders  are  entitled  to  share  in  the  prof- 
its or  surplus  shall  on  all  participating  policies  hereafter  is- 
sued, beginning  not  later  than  the  end  of  the  fifth  policy 
year  and  thereafter  at  the  end  of  periods  of  not  more  than 
five  years,  determine  and  account  for  the  portion  of  the  di- 
visible surplus  accruing  on  the  policy,  and  the  owner  of  the 
policy  shall  have  the  right  at  his  option  to  have  the  current 
dividend  arising  from  such  apportionment  paid  in  cash. 
Whenever  such  apportionment  has  been  made  and  credited 
to  a  policyholder  and  left  with  the  company,  the  amount 
thereof  shall  be  reported  as  a  separate  item  under  the  head 
of  liabilities  in  each  annual  statement  made  to  the  Insurance 
Department  of  this  State. 

The  term  "divisible  surplus"  herein  used,  is  defined  to 
mean  the  excess  of  admitted  assets  over  and  above  the 
total  amount  of  all  liabilities,  including  legal  reserve,  paid- 
up  or  guaranty  capital  stock  and  any  surplus  set  aside  for 
the  specific  purpose  of  retiring  said  guaranty  capital  stock, 
or  one  hundred  thousand  dollars  of  required  surplus  if  there 
be  no  capital  stock   and  the  contingency  reserve. 


—48— 

Sec.  2.  Be  it  further  enacted.  That  any  life  insurance 
company  doing  business  in  this  State  may  accumulate  and 
maintain,  in  addition  to  the  amount  of  capital  and  surplus 
contributed  by  stockholders,  or  if  there  be  no  capital  stock, 
in  addition  to  one  hundred  thousand  dollars  of  required 
surplus,  and  in  addition  to  the  amount  of  the  net  values  of 
its  policies,  computed  according  to  the  laws  of  the  jurisdic- 
tion under  which  it  is  organized,  and  in  addition  to  the 
amount  of  the  temporary  capital  stock,  if  such  there  be,  a 
contingency  reserve  not  exceeding  the  following  respective 
percentages  of  the  amount  of  the  said  net  values,  to  wit : 

When  the  amount  of  said  net  values  is  less  than  one 
hundred  thousand  dollars,  20  per  centum  thereof,  or  the 
sum  of  ten  thousand  dollars,  whichever  is  the  greater ;  when 
the  amount  of  said  net  values  is  more  than  one  hundred 
thousand  dollars,  the  percentage  thereof,  measuring  the  con- 
tingency reserve,  shall  decrease  one-half  of  one  per  centum 
for  each  one  hundred  thousand  dollars  of  the  amount  of  said 
net  values  up  to  one  million  dollars;  one-half  of  one  per 
centum  of  each  additional  one  million  dollars  up  to  ten 
million  dollars;  one-half  of  one  per  centum  for  each  addi- 
tional two  million  five  hundred  thousand  dollars  up  to  twenty 
million  dollars ;  one-half  of  one  per  centum  for  each  addi- 
tional five  million  dollars  up  to  fifty  million  dollars ;  one- 
half  of  one  per  centum  for  each  additional  twenty-five  mil- 
lion dollars  up  to  seventy-five  million  dollars ;  and  if  the 
amount  of  said  net  values  equal  or  exceed  the  last  men- 
tioned amount,  the  contingency  reserve  shall  not  exceed 
five  per  centum  thereof;  provided,  that  as  the  amount 
of  the  net  values  of  said  policies  increase  and  the  maxi- 
mum percentage  measuring  the  contingency  reserve  de- 
creases, such  corporation  may  maintain  the  contingency  re- 
serve already  accumulated  hereunder,  although  for  the  time 
being  it  may  exceed  the  maximum  percentage  herein  pre- 
scribed, but  may  not  add  to  the  contingency  reserve  when 
the  addition  will  bring  it  beyond  the  maximum  percentage; 
Provided,  further,  that  for  cause  shown  the  Commissioner 
of  Insurance  may  at  any  time  and  from  time  to  time  permit 


—49— 

any  corporation  to  accumulate  and  maintain  a  contingency 
reserve  in  excess  of  the  limit  above  mentioned  for  a  pre- 
scribed period,  not  exceeding  one  year  under  any  one  per- 
mission, by  filing  in  his  office  a  decision  stating  his  reasons 
therefor  and  causing  the  same  to  be  published  in  his  next 
annual  report. 

This  section  shall  not  apply  to  any  company  doing  exclu- 
sively a  non-participating  business. 

Sec.  3.  Be  it  further  enacted,  That  in  the  event  of  de- 
fault in  the  payment  of  any  premium  due  on  any  policy, 
provided  that  not  less  than  three  full  years'  premiums  shall 
have  been  paid,  and  provided  further,  such  policy  shall  not 
be  continued  in  force  by  virtue  of  any  automatic  loan  pro- 
vision therein,  that  there  shall  be  secured  to  the  owner  of  the 
policy  a  stipulated  form  of  insurance  as  may  be  specified 
therein,  the  net  value  of  which  shall  be  at  least  equal  to  the 
reserve  at  the  date  of  default  on  the  policy  and  on  any 
dividend  additions  thereto,  according  to  the  mortality  table 
and  the  rate  of  interest  for  computing  such  reserve  as 
specified  in  said  policy,  less  a  sum  not  more  than  two  and 
one-half  per  centum  of  the  amount  insured  by  the  policy 
and  of  any  existing  dividend  additions  thereto  and  less  any 
existing  indebtedness  to  the  company  on  the  policy  at  the 
time  of  default. 

There  shall  also  be  secured  to  the  owner  of  the  policy  the 
right  to  surrender  the  same  to  the  company  at  its  home 
office  within  one  month  from  date  of  default  for  a  specified 
cash  value  at  least  equal  to  the  sum  which  would  otherwise 
be  available  for  the  purchase  of  insurance  as  aforesaid,  and 
the  payment  of  which  cash  value  by  the  said  company  shall 
not  be  deferred  for  more  than  six  (6)  months  after  appli- 
cation therefor  is  made. 

Sec.  4.  Be  it  further  enacted,  That  no  agreement  between 
the  company  and  the  policyholder  or  applicant  for  insurance 
shall  be  held  to  waive  any  of  the  provisions  of  this  Act. 


—so- 
Sec.  5.    Be  it  further  enacted.  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  shall  take  effect  from  and  after 
January  i,  1908,  the  public  welfare  requiring  it. 
Passed  April  12,  1907. 
Approved  April  15,  1907. 


—SI- 
SPECIAL   BOARD  CONTRACTS  AND 
SALE  OF  AGENCY  STOCK 
PROHIBITED. 


CHAPTER  456,  ACTS  OF  1907. 

AN  ACT  to  prohibit  Life  Insurance  Companies,  their  offi- 
cers, agents,  solicitors  and  representatives  from  making 
contracts  for  employment  or  services  and  from  giving, 
selling  or  purchasing  stocks,  bonds  and  other  securities 
of  any  corporations,  associations  or  partnerships  and 
dividends  and  profits  to  accrue  theron,  as  an  inducement 
to  insurance  or  in  connection  therewith. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  life  insurance  company  doing 
business  in  this  State  and  no  officer,  agent,  solicitor  or 
representative  of  such  company  shall  make  or  offer  to  make, 
directly  or  indirectly,  as  an  inducement  to  insurance  or  in 
connection  therewith  any  contract  for  employment  or  ser- 
vices of  any  kind,  and  no  such  company,  officer,  agent,  solici- 
tor or  representative,  shall,  directly  or  indirectly,  give,  sell 
or  purchase,  or  offer  to  give,  sell  or  purchase,  as  an  induce- 
ment to  insurance  or  in  connection  therewith,  any  stock, 
bonds  or  other  securities  of  any  insurance  company  or  other 
corporation,  association  or  partnership,  or  any  dividends  or 
profits  to  accrue  thereon. 

Sec.  2.  Be  it  further  enacted,  That  any  life  insurance 
company  or  any  officer,  agent,  solicitor  or  representative  of 
any  life  insurance  company  who  shall  violate  any  of  the 
provisions  of  this  Act,  shall  be  guilty  of  a  misdemeanor  and 
upon  conviction  thereof,  shall  be  fined  not  less  than  one 
hundred  dollars  and  not  more  than  two  hundred  dollars. 

Sec.  3.  Be  it  further  enacted.  That  all  laws  and  parts  of 
laws  in  conflict  with  this  Act  are  hereby  repealed,  and  that 
this  Act  take  effect  from  and  after  its  passage,  the  public 
welfare  requiring  it. 

Passed  April  12,  1907. 

Approved  April  15,  1907. 


CORPORATIONS  AND  STOCK  COMPAN- 
IES PROHIBITED  FROM  ACTING 
AS  AGENTS  OF  LIFE  INSUR- 
ANCE COMPANIES. 


CHAPTER  444,  ACTS  OF   1907. 

AN  ACT  to  prohibit  Corporations  and  Stock  Companies 
from  acting  as  agents  or  representatives  of  Life  Insur- 
ance Companies. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  corporation  or  stock  company 
shall  act,  or  be  licensed  to  act,  as  an  agent  or  representative 
of  any  life  insurance  company  or  association  in  soliciting, 
selling,  delivering,  writing,  or  in  any  manner  placing  or 
causing  to  be  placed  any  life  insurance  policy  or  contract  in 
this  State. 

Sec.  2.  Be  it  further  enacted,  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  12,  1907. 


—53— 

MISREPRESENTATIONS  OF  LIFE 
INSURANCE  POLICIES. 


CHAPTER  455,  ACTS  OF  1907. 

AN  ACT  to  prohibit  misrepresentation  of  Life  Insurance 
Policies  and  to  repeal  Chapter  25,  Acts  of  1899,  ap- 
proved March  27,  1899,  t;ntitled  "An  Act  seeking  to  pre- 
vent misrepresentation  on  the  part  of  agents  in  the  sale 
of  life  insurance  policies," 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  life  insurance  company  doing 
business  in  this  State,  and  no  officer,  director  or  agents 
thereof,  shall  issue  or  circulate,  or  cause  or  permit  to  be  is- 
sued or  circulated,  any  estimate,  illustration,  circular  or 
statement  of  any  sort  misrepresenting  the  terms,  conditions 
or  character  of  any  policy  issued  by  it  or  the  benefits  or  ad- 
vantages promised  thereby,  or  the  dividends  or  shares  of 
surplus  to  [be]  received  thereon,  or  shall  use  any  name  or 
title  of  any  policy  or  class  of  policies  misrepresenting  the 
true  nature  thereof. 

Sec.  2.  Be  it  further  enacted,  That  no  agent  or  solicitor 
of  any  life  insurance  company  shall  misrepresent,  orally  or 
otherwise,  any  of  the  terms,  conditions  or  character  of  any 
life  insurance  policy  sold  to  a  citizen  of  this  State,  or  the 
benefits  or  advantages  promised  thereby,  or  the  dividends 
or  shares  of  surplus  to  be  received  thereon. 

Sec.  3.  Be  it  further  enacted.  That  the  Insurance  Com- 
missioner of  this  State  is  hereby  authorized  to  revoke,  for  a 
period  of  one  year,  the  license  of  any  life  insurance  com- 
pany that  violates,  or  permits  any  of  its  officers,  directors  or 
agents  to  violate,  any  of  the  provisions  of  Section  i  of  this 
Act,  and  to  revoke  for  a  period  of  one  year  the  license  of  any 
agent  or  solicitor  who  violates  any  of  the  provisions  of  Sec- 
tion 2  of  this  Act. 


—54— 

Sec.  4.  Be  it  further  enacted,  That  whenever  the  Insur- 
ance Commissioner  believes  or  has  good  reason  to  believe 
that  any  of  the  provisions  of  this  Act  have  been  violated,  it 
is  hereby  made  his  duty  to  give  notice  in  writing  to  the 
company  or  person  believed  to  be  guilty  of  such  violation, 
specifying  the  charges  and  citing  him  or  it  to  appear  before 
him  at  a  certain  date  and  show  cause  why  the  penalty  here- 
in provided  should  not  be  imposed.  If,  after  a  thorough 
investigation,  the  Insurance  Commissioner  is  satisfied  that 
any  of  the  provisions  of  this  law  have  been  violated,  he  may 
impose  the  penalty  herein  provided  upon  the  company  or 
person  guilty  of  such  violation ;  Provided,  however,  that  an 
appeal  may  be  taken  within  thirty  days  from  his  decision,  to 
the  Circuit  Court  of  the  county  in  which  the  offense  was 
committed  and  the  cause  there  heard  de  novo. 

Sec.  5.  Be  it  further  enacted.  That  all  laws  and  parts  of 
laws  in  conflict  with  this  Act,  including  Chapter  25,  Acts  of 
1899,  approved  March  27,  1899,  are  hereby  repealed,  and 
that  this  Act  take  effect  from  and  after  its  passage,  the  pub- 
lic welfare  requiring  it. 

Passed  April  11,  1907. 

Approved  April  15,  1907. 


—55— 

REGULATION  OF  SALARIES  AND  COM- 
PENSATION PAID  TO  OFFICERS 
AND  AGENTS  OF   LIFE   IN- 
SURANCE COMPANIES. 


CHAPTER  440,  ACTS  OF  1907. 

AN  ACT  to  regulate  and  limit  the  salaries  and  compensa- 
tions of  officers,  trustees,  agents  and  employes  of  Life 
Insurance  Companies,  and  to  prohibit  the  granting  of 
pensions  by  Life  Insurance  Companies. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee^  That  no  life  insurance  company  or 
association  doing  business  in  this  State  shall  pay  any  salary, 
compensation  or  emolument  to  any  officer,  trustee  or  direc- 
tor thereof  or  any  salary,  compensation  or  emolument 
amounting  in  any  one  year  to  more  than  five  thousand 
dollars  to  any  one  person,  firm  or  corporation,  unless  such 
payment  be  first  authorized  by  a  vote  of  the  Board  of 
Directors  of  such  life  insurance  company  or  association; 
nor  shall  any  such  life  insurance  company  or  association 
make  any  agreement  with  any  of  its  officers,  trustees  or  sal- 
aried employes  whereby  it  agrees  that  for  any  services  ren- 
dered or  to  be  rendered  he  shall  receive  any  salary,  com- 
pensation or  emolument  that  will  extend  beyond  a  period  of 
twelve  months  from  the  date  of  such  agreement;  nor 
shall  any  officer,  director  or  trustee,  who  is  paid  a  salary 
for  his  services  of  more  than  one  hundred  dollars  per  month, 
receive  any  other  compensation  or  emolument ;  Provided, 
however,  that  the  requirements  of  this  Act  shall  not  apply 
to  the  amount  paid  to  general  agents  in  commissions  under 
their  contract  made  on  the  regular  commission  basis;  that 
the  limitation  as  to  time  contained  herein,  shall  not  be  con- 
strued as  preventing  a  life  insurance  company  from  enter- 
ing into  contracts  with  its  agents  for  the  payment  of  renewal 
commissions. 


-56- 

Sec.  2.  Be  it  fuj-ther  enacted,  That  no  life  insurance  com- 
pany doing  business  in  this  State  shall  grant  any  pension  to 
any  officer,  director  or  trustee  thereof,  or  to  any  member  of 
his  family  after  his  death,  or  to  any  other  person  whomso- 
ever. 

Sec.  3.  Be  It  further  enacted,  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  12,  1907. 


—57- 


THE  FUNDS  OF  AN  INSURANCE  COM- 
PANY CANNOT  BE  USED  FOR 
POLITICAL  PURPOSES. 


CHAPTER  443,  ACTS  OF  1907. 

AN  ACT  to  prohibit  the  use  of  the  funds  of  any  Insurance 
Company  for  political  purposes. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  officer,  trustee,  director,  stock- 
holder, attorney,  agent  or  representative  of  any  insurance 
company  or  association,  including  fraternal  beneficiary  asso- 
ciations, doing  business  in  this  State,  shall,  directly  or  in- 
directly, pay  or  use  or  offer,  consent  or  agree  to  pay  or  use 
any  of  the  funds  of  such  insurance  company  or  association 
for  or  in  aid  of  any  political  party,  committee  or  organiza- 
tion, or  for  [or]  in  aid  of  any  corporation,  joint  stock  or 
other  association  organized  or  maintained  for  political  pur- 
poses, or  for  or  in  aid  of  any  candidate  for  political  office,  or 
for  nomination  for  such  office,  or  for  any  political  purpose 
whatsoever,  or  for  the  reimbursement  or  indemnification  of 
any  person  for  money  or  property  so  used ;  nor  shall  any 
person  solicit  or  knowingly  receive  any  money  or  property  of 
any  insurance  company  or  association  to  be  used  for  or  in  aid 
of  any  political  party,  committee  or  organization,  or  for  or  in 
aid  of  any  corporation,  joint  stock  or  other  association  or- 
ganized or  maintained  for  political  purposes,  or  for  or  in 
aid  of  any  candidate  for  political  office  or  for  nomination 
for  such  office,  or  for  any  political  purpose  whatsoever,  or 
for  the  reimbursement  or  indemnification  of  any  person  for 
money  or  property  so  used. 

Sec.  2.  Be  it  further  enacted,  That  any  officer,  trustee, 
director,  stockholder,  attorney,  agent  or  representative  of 
any  insurance  company  or  association  or  fraternal  benefi- 
ciary association  who  violates  any  of  the  provisions  of  this 


-5^ 

Act,  or  who  participates  in,  aids,  abets,  or  advises  or  consents 
to  any  such  violation,  and  any  person  v^^ho  soUcits  or  know- 
ingly receives  any  money  or  property  in  violation  of  this 
Act  shall  be  guilty  of  a  misdemeanor  and  be  punished  by 
imprisonment  for  not  more  than  one  year  and  a  fine  of  not 
more  than  one  thousand  dollars.  The  Insurance  Commis- 
sioner of  this  State  is  hereby  authorized  to  revoke  the  license 
of  any  insurance  company,  the  funds  of  which  have  been 
used  in  violation  of  the  provisions  of  this  Act. 

Sec.  3.  Be  it  further  enacted,  That  any  officer,  trustee, 
director,  stockholder,  agent  or  representative  of  any  insur- 
ance company,  or  any  other  person  who  shall  make  or 
cause  to  be  made  or  solicit  or  receive  any  contribution  in 
violation  of  this  Act,  shall  be  liable  to  the  company  or  asso- 
ciation for  the  amount  so  contributed. 

Sec.  4.  Be  it  further  enacted.  That  no  person  shall  be 
excused  from  attending  and  testifying  or  producing  any 
papers,  books  or  other  documents  before  any  court  or  magis- 
trate, upon  any  investigation,  proceeding  or  trial,  for  a  viola- 
tion of  any  of  the  provisions  of  this  Act,  upon  the  ground 
or  for  the  reason  that  the  testimony  or  evidence,  documen- 
tary or  otherwise,  required  of  him  may  tend  to  incriminate 
or  degrade  him ;  but  no  person  shall  be  prosecuted  or  sub- 
jected to  any  penalty  or  forfeiture  for  or  on  account  of  any 
transaction,  matter  or  thing  concerning  which  he  may  so 
testify  or  produce  evidence,  documentary  or  otherwise ;  and 
no  testimony  so  given  or  produced  shall  be  used  against 
him  upon  any  criminal  investigation  or  proceeding. 

Sec.  5.  Be  it  further  enacted,  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  12,  1907. 


—59— 


DISBURSEMENTS  OF  LIFE  INSUR- 
ANCE COMPANIES. 


CHAPTER  439,  ACTS  OF  1907. 

AN  ACT  to  regulate  disbursements  by  Life  Insurance  Com- 
panies. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  life  insurance  company  do- 
ing business  in  this  State  shall  make  any  payment  out  of  its 
funds  amounting  to  one  hundred  dollars  or  more  unless  the 
same  be  evidenced  by  a  voucher  signed  by  or  on  behalf  of 
the  person,  firm  or  corporation  receiving  the  money  and  cor- 
rectly describing  the  consideration  for  the  payment.  If  the 
payment  be  for  both  services  and  other  purposes,  the  vouch- 
er shall  set  forth  an  itemized  statement  of  the  specific  ser- 
vices rendered  and  of  all  other  expenditures.  If  the  expen- 
diture be  in  connection  with  any  matter  pending  before  any 
legislative  or  public  body,  or  before  any  department  or  offi- 
cer of  any  State  or  Government,  the  voucher  shall  correctly 
describe,  in  addition,  the  nature  of  the  matter  and  the  inter- 
est of  such  company  therein.  When  such  voucher  cannot  be 
obtained,  the  expenditure  shall  be  evidenced  by  an  affidavit 
describing  the  character  and  object  of  the  expenditure  and 
stating  the  reason  for  not  obtaining  such  voucher. 

Sec.  2.  Be  it  further  enacted,  That  all  laws  and  parts 
of  laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  12,  1907. 


INVESTMENT   OF   FUNDS   OF  DO- 
MESTIC LIFE  INSURANCE 
COMPANIES. 


CHAPTER  458,  ACTS  OF  1907. 

AN  ACT  to  regulate  the  investment  of  the  funds  of  domes- 
tic Life  Insurance  Companies. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  no  domestic  life  insurance  com- 
pany, whether  incorporated  by  special  Act  or  under  a  gen- 
eral law  of  this  State,  shall  subscribe  to  or  participate  in  any 
underwriting  of  the  purchase  or  sale  of  securities  or  prop- 
erty or  enter  into  any  transaction  for  such  purchase  or  sale 
on  account  of  said  company  jointly  with  any  other  person, 
firm  or  corporation;  nor  shall  any  such  company  enter  into 
any  agreement  to  withhold  from  sale  any  of  its  property, 
but  the  disposition  of  its  property  shall  be  at  all  times  with- 
in the  control  of  its  Board  of  Directors.  No  investment  or 
loan,  except  policy  loans,  shall  be  made  by  any  such  life  in- 
surance company,  unless  the  same  shall  first  have  been  au- 
thorized by  the  Board  of  Trustees  or  by  a  committee  there- 
of charged  with  the  duty  of  supervising  such  investment  or 
loan. 

Sec.  2.  Be  it  further  enacted.  That  domestic  life  insur- 
ance companies  may  invest  their  funds  and  accumulations 
in  bonds  of  the  United  States,  or  of  this  State,  or  of  any 
other  State,  or  of  any  county  of  this  or  any  other  State,  or 
of  any  incorporated  city  or  town  of  this  or  any  other  State, 
or  in  the  mortgage  bonds  of  any  dividend-paying  railway  or 
street  railway  company  duly  incorporated  and  organized 
under  the  authority  of  this  State  or  any  other  State,  or  in 
other  good  and  solvent  securities  subject  to  the  approval  of 
the  Insurance  Commissioner  of  this  State;  and  such  com- 


— 6i— 

panics  may  loan  their  funds  upon  improved,  unincumbered 
real  property  in  any  State,  not  exceeding,  however,  fifty 
per  centum  of  the  value  of  such  property,  or  upon  security 
or  promissory  notes  amply  secured  by  pledge  of  any  bonds 
or  other  securities  in  which  such  companies  are  hereby 
authorized  to  invest  their  funds,  or  upon  the  security  of 
their  own  policies ;  provided  the  loan  upon  any  policy  shall 
not  exceed  the  reserve  -value  thereof. 

Sec.  3.  Be  it  further  enacted,  That  domestic  life  insur- 
ance companies  may  acquire,  hold  and  convey  real  property 
only  for  the  following  purposes  and  in  the  following  man- 
ner: 

1.  Such  as  shall  be  requisite  for  convenient  accommoda- 
tion in  the  transaction  of  its  business, 

2.  Such  as  shall  have  been  mortgaged  to  it  in  good  faith 
by  way  of  security  for  loans  previously  contracted,  or  for 
moneys  due. 

3.  Such  as  shall  have  been  conveyed  to  it  in  satisfaction 
of  debts  previously  contracted  in  the  course  of  its  dealings. 

4.  Such  as  shall  have  been  purchased  at  sales  on  judg- 
ments, decrees  or  mortgages  obtained  or  made  for  such 
debts. 

All  such  real  property  specified  in  Sub-sections  2,  3  and 
4  of  this  section,  which  shall  not  be  necessary  for  its  accom- 
modation in  the  convenient  transaction  of  its  business,  shall 
be  sold  and  disposed  of  within  two  years  after  the  company 
shall  have  acquired  title  to  the  same,  or  within  two  years 
after  the  same  shall  have  ceased  to  be  necessary  for  the 
accommodation  of  its  business;  and  it  shall  not  hold  such 
property  for  a  longer  period  unless  it  shall  procure  a  certifi- 
cate from  the  Insurance  Commissioner  authorizing  an  exten- 
sion of  time  for  the  sale  of  such  property.  The  Insurance 
Commissioner  is  hereby  authorized  to  issue  such  a  certifi- 
cate extending  the  time  for  the  sale  of  such  property,  if  in 
his  judgment  it  appears  that  the  interest  of  the  company 
will  suffer  materiallv  bv  a  forced  sale  of  such  property. 


—62— 

Sec.  4.  Be  it  further  enacted,  That  no  domestic  life  in- 
surance company  shall  invest  or  loan  its  funds  in  any  man- 
ner  except  as  provided   in  this   Act. 

Sec.  5.  Be  it  further  enacted,  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  12,  1907. 

Approved  April  15,  1907. 


"63- 


INSURANCE   AGENTS  ARE   AGENTS 
OF  THE  COMPANIES. 


CHAPTER  442,  ACTS  OF   1907. 

AN  ACT  to  define  the  status  of  persons  soliciting  insur- 
ance. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  any  person  who  shall  solicit  an 
application  for  insurance,  shall  in  all  matters  relating  to  such 
application,  and  the  policy  issued  in  consequence  thereof,  be 
regarded  as  an  agent  of  the  company  issuing  the  policy  and 
not  the  agent  of  the  insured,  and  all  provisons  in  the  appli- 
cation and  policy  to  the  contrary  are  void  and  of  no  effect 
whatever ;  Provided,  this  Act  shall  not  apply  to  licensed 
fire  insurance  brokers. 

Sec.  2.  Be  it  further  enacted.  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  herebv 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  12,  1907. 


-6a- 


THE  POLICY  IS  THE  ENTIRE  INSUR- 
ANCE   CONTRACT. 


CHAPTER  441,  ACTS  OF  1907. 

AN  ACT  to  define  and  limit  the  provisions  of  an  Insurance 
Contract  and  to  determine  the  place  where  such  contract 
was  made. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  every  policy  of  insurance  issued  to 
or  for  the  benefit  of  any  citizen  or  resident  of  this  State  on 
or  after  the  first  day  of  July,  1907,  by  any  insurance  com- 
pany or  association  doing  business  in  this  State,  except  fra- 
ternal beneficiary  associations  and  mutual  insurance  com- 
panies or  associations  operating  on  the  assessment  plan,  shall 
contain  the  entire  contract  of  insurance  between  the  parties, 
to  said  contract,  and  every  such  contract  so  issued  shall  be 
held  as  made  in  this  State  and  construed  solely  according  to 
the  laws  of  this  State. 

Sec.  2.  Be  it  further  enacted,  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  are  hereby  re- 
pealed and  that  this  Act  shall  take  efifect  on  the  first  day  of 
July,  1907,  and  be  in  force  thereafter,  the  public  welfare  re- 
quiring it. 

Passed  April  10,  1907. 

Approved  April  12,  1907, 


-65- 
FIRE  MARSHAL   LAW. 


CHAPTER  460,  ACTS  OF   1907. 

AN  ACT  to  reduce  the  fire  waste  in  Tennessee  by  providing 
for  the  investigation  of  fires,  and  to  provide  for  the  ex- 
pense of  said  investigations. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  the  Insurance  Commissioner  and 
the  Sheriffs  are  hereby  authorized  to  investigate  the  cause, 
origin  and  circumstances  of  every  fire  occurring  in  the  State, 
by  which  property  has  been  destroyed  or  damaged,  and  shall 
specially  make  investigation  as  to  whether  such  fire  was  the 
result  of  carelessness  or  design. 

Whenever  such  fire  occurs  it  shall  be  the  duty  of  the 
Sheriff  to  notify  the  Insurance  Commissioner  as  early  as 
practicable  thereafter  of  the  occurrence  of  such  fire.  It 
shall  be  a  sufficient  compliance  with  this  requirement  to  send 
said  notice  as  aforesaid  by  registered  mail,  addressed  to  the 
Insurance  Commissioner  at  Nashville. 

A  preliminary  investigation  of  all  fires  shall  be  made  by 
the  Sheriff,  and  shall  be  begun  within  three  days,  not  in- 
cluding Sunday,  of  the  occurrence  of  such  fire,  if  he  is 
iriformed  of  the  occurrence  of  such  fire  within  three 
days  thereafter,  and,  if  not,  then  as  soon  as  practi- 
cable after  he  has  such  information ;  and  the  Insur- 
ance Commissioner  shall  have  the  right  to  supervise  and 
direct  such  investigation  whenever  he  deems  it  necessary 
or  expedient.  The  officer  making  such  investigation  of  fires 
shall  within  one  week  of  the  occurrence  of  the  fire  (if  the 
preliminary  investigation  can  be  concluded  in  that  time,  if 
not,  then  as  soon  thereafter  as  such  investigation  is  con- 
cluded) furnish  to  the  said  Insurance  Commissioner  a  writ- 
ten statement  of  all  the  facts  relating  to  the  cause  and  origin 
of  the  fire,  the  kind,  and  ownership  of  the  property 
5 


-66— 


destroyed,  and  such  other  mformation  as  may  be  called  for 
by  the  blanks  provided  by  the  Insurance  Commissioner. 
The  Insurance  Commissioner  shall  keep  in  his  of^ce  a  record 
of  all  fires  occurring  in  the  State,  together  with  all  facts,, 
statistics  and  circumstances,  including  the  origin  of  the 
fires,  which  may  be  developed  by  the  investigations  provided 
for  by  this  Act. 

Sec.  2.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  have  power,  and  it  shall  be  his  duty,  eithei 
in  person  or  by  deput} ,  or  by  the  officers' provided  in  Section 
I  of  this  Act,  to  examine,  or  cause  examination  to  be  made, 
into  the  cause,  circumstances  and  origin  of  all  fires  occurring 
within  the  State  to  which  his  attention  has  been  called  in 
accordance  with  the  provisions  of  Section  i,  or  otherwise, 
by  which  property  is  accidentally  or  unlawfully  destroyed  or 
damaged  by  fire,  and  to  specially  examine  and  decide 
whether  said  fire  was  the  result  of  carelessness,  or  was  the 
act  of  an  incendiary.  The  Insurance  Commissioner  shall 
in  person,  by  deputy,  or  by  an  officer  named  for  the  purpose 
in  Section  i  herein,  fully  investigate  all  the  circumstances 
surrounding  such  fire,  and  when,  in  the  opinion  of  the  officer 
making  such  examination,  such  proceedings  are  necessary, 
take  or  cause  to  be  taken  the  testimony  on  oath  of  all 
persons  supposed  to  be  cognizant  of  any  of  the  facts,  or  to 
have  means  of  knowledge  in  relation  to  the  matters  as  to 
which  an  examination  is  hereby  required  to  be  made,  and 
shall  cause  the  same  to  be  reduced  to  writing.  If  the  In- 
surance Commissioner  shall  be  of  the  opinion  that  there  is 
evidence  sufficient  to  charge  any  person  with  the  crime  of 
arson,  or  other  wilful  burning,  he  shall  cause  such  person 
to  be  arrested  and  charged  with  such  offense,  prosecuted 
and  bound  over  to  the  Circuit  or  Criminal  Court  of  the 
county  where  such  fire  occurred,  and  shall  furnish  to  the 
Attorney  General  of  the  district  all  such  evidence,  together 
with  the  names  of  the  witnesses,  and  all  information  obtained 
by  him,  including  a  copy  of  all  pertinent  and  material  tes- 
timony taken  in  the  case. 

Sec.  3.     Be  it  further  enacted,  That  when  conducting  an 


-67- 

examination  or  investigation  provided  for  in  this  Act,  the 
Insurance  Commissioner  or  his  deputy,  or  any  other  officer 
authorized  by  this  Act  to  conduct  such  investigation,  shall 
have  all  the  power  of  a  trial  justice  in  this  State  for  the 
purpose  of  summoning  and  compelling  the  attendance  of 
witnesses  to  testify  in  relation  to  any  matter  which  is  by  the 
provisions  of  this  Act  a  subject  of  inquiry  and  investigation, 
and  may  administer  oaths  and  affirmations  to  persons  appear- 
ing as  witnesses  before  them ;  and  false  swearing  by  any 
witness  in  any  matter  or  proceeding  aforesaid  shall  be 
deemed  perjury  and  punished  as  such. 

Sec.  4.  Be  it  further  enacted.  That  the  Insurance  Com- 
missioner or  his  deputy,  or  any  of  the  officers  authorized 
by  this  Act  to  investigate  fires,  shall  have  the  right  and  au- 
thority, at  all  times  of  the  day  or  night,  in  performance 
of  the  duties  imposed  by  the  provisions  of  this  Act,  to  enter 
upon  and  examine  any  building  or  premises  where  a  fire 
has  occurred,  and  any  other  building  or  premises  adjoining 
the  same.  Any  investigation  held  under  the  provisions  of 
this  Act  may,  in  the  discretion  of  the  officer  holding  same,  be 
private,  and  persons  other  than  those  required  to  be  present 
may  be  excluded  from  the  place  where  such  investigation  is 
held,  and  witnesses  may  be  kept  separate  and  apart  from  each 
other,  and  not  allowed  to  communicate*  with  each  other  until 
they   have   been    examined. 

Sec.  5.  Be  it  further  enaetcd,  That  any  officer  referred  to 
in  this  Act  who  neglects  or  refuses  to  comply  with  any  of 
the  requirements  of  this  Act  shall  be  guilty  of  a  misde- 
meanor, and  upon  a  conviction  shall  be  punished  by  a  fine 
of  not  less  than  fifty,  nor  more  than  two  hundred  and  fifty 
dollars. 

Sec.  6.  Be  it  further  enaeted,  That  a  tax  of  one-fifth 
of  one  per  centum  on  the  gross  premium  receipts  of  the 
fire  insurance  companies  doing  business  in  this  State  shall 
be,  and  it  is  hereby,  levied  for  the  purpose  of  providing  a 
fund  for  defraying  the  cost  of  the  enforcement  of  this  Act, 
to  be  collected  by  the  Insurance  Commissioner  as  other  taxes 


—68— 

on  fire  insurance  companies  are  now  collected  in  this  State ; 
and  the  Insurance  Commissioner  shall  keep  a  separate  ac- 
count of  all  moneys  received  and  disbursed  under  this  Act, 
and  shall  include  same  in  his  annual  report.  The  Insurance 
Commissioner  shall  pay  all  necessary  expenses,  including 
counsel,  expenses  of  deputy,  detectives  and  officers,  incurred 
in  the  performance  of  the  duties  imposed  by  this  Act  out  of 
said  fund  hereinbefore  provided,  and  any  surplus  of  said 
fund  remaining  at  the  end  of  any  year  shall  be  turned  into 
the  State  Treasury. 

Sec.  7.  Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  15,  1907. 


-69- 


COUNTY   MUTUAL   FIRE   INSURANCE 
COMPANIES. 


CHAPTER  463,  ACTS  OF  1907. 

AN  ACT  to  govern  and  regulate  the  business  of  county 
mutual  fire  insurance  companies  incorporated  under  the 
laws  of  this  State  and  operating  on  the  assessment  plan, 
and  to  repeal  Chapter  220  of  the  Acts  of  1895. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  a  county  mutual  fire  insurance 
company  is  hereby  defined  to  mean  a  company  incorporated 
under  the  laws  of  Tennessee  for  the  purpose  of  insuring 
property  against  damage  by  fire,  lightning  and  tornadoes, 
without  capital  stock  or  guaranteed  capital,  and  which  ope- 
rates on  the  assessment  plan  and  is  limited  to  one  or  more 
counties,  as  hereinafter  provided,  in  the  transaction  of  its 
business. 

Sec.  2.  Be  it  further  enacted,  That  no  county  mutual 
fire  insurance  company  shall  commence  the  transaction  of 
business  until  it  receives  from  the  Insurance  Commissioner 
a  certificate  of  authority,  which  certificate  shall  state  that 
such  company  has  complied  with  the  provisions  of  this  Act. 

Sec.  3.  Be  it  further  enacted.  That  every  such  insurance 
company  shall  file  with  the  Insurance  Commissioner  a  cer- 
tified copy  of  its  charter  or  articles  of  incorporation,  together 
with  a  sworn  statement  of  three  of  the  incorporators,  that 
bona  fide  applications  have  been  made  by  not  less  than 
twenty-five  citizens,  for  not  less  than  fifty  thousand  dollars 
of  insurance,  of  which  amount  no  one  or  more  risks  subject 
to  one  fire  shall  exceed  one  thousand  dollars,  said  risks  to 
be  located  in  the  county  in  which  such  company  has  its 
domicile. 

Sec.  4.  Be  it  further  enacted.  That  every  such  corpora- 
tion may  then  be  authorized  to  issue  policies  of  insurance, 


— 70— 

signed  by  its  president  and  secretary,  agreeing,  in  the  name 
of  the  corporation,  to  pay  all  damages  caused  by  fire,  light- 
ning or  tornado  done  to  the  property  insured  during  the  life 
of  the  policy.  There  shall  be  a  clause  plainly  printed  in  each 
policy  that  the  holder  thereof,  or  the  insured,  is  liable  for 
such  assessments  as  may  be  necessary  to  pay  in  full  all  losses 
and  expenses  incurred  by  the  corporation. 

Sec.  5.  Be  it  further  enacted,  That  every  person  insured 
by  or  in  any  such  corporation  shall  first  give  his  undertaking, 
in  such  form  as  the  corporation  may  prescribe,  which  form 
shall  be  uniform  by  and  between  all  the  insured,  to  pay 
their  pro  rata  share  of  all  losses  or  damages  sustained  by 
any  mem.ber  thereof  from  any  cause  specified  in  the  policy, 
and  any  expenses  incurred  by  the  company  and  for  the  cre- 
ation of  a  surplus  fund.  All  dues,  premiums  or  assess- 
ments shall  be  made  pro  rata  upon  all  property  insured, 
according  to  its  classification  and  according  to  the  amount 
insured.  The  corporation  is  authorized  to  borrow  money 
for  the  purpose  of  paying  losses,  and  no  assessment  shall 
be  invalid  because  made  in  whole  or  in  part  for  the  purpose 
of  paying  any  money  borrowed  by  the  corporation  which 
has  been  used  in  the  payment  of  any  claim  for  loss,  damage 
or  expenses  against  the  corporation. 

Sec.  6.  Be  it  further  enacted.  That  the  officers  of  the 
corporation  shall  not  enter  into  any  contract  or  agreement 
or  make  any  debt  of  any  kind,  except  for  the  payment  of 
losses. 

Sec.  7.  Be  it  further  enacted,  That  the  secretary  of  any 
such  company  shall  notify  every  member  of  the  corporation, 
by  written  or  printed  notice  signed  by  him,  stating  the 
amount  due  the  corporation  from  the  members,  and  the  time 
when,  place  where,  and  to  whom  it  shall  be  paid.  Such  pay- 
ment shall  be  made  by  the  member  within  sixty  days  from 
the  delivery  of  the  notice,  which  notice  may  be  delivered 
personally  or  by  mail;  and  if  by  mail  delivery  shall  be 
deemed  complete  on  each  member  when  deposited  in  the 
postoffice  at  the  place  where  the  principal  office  of  the  cor- 


—71— 

poration  is  located,  directed  to  each  member  at  the  last 
postoffice  address  given  on  the  company's  books  of  record, 
postage  prepaid. 

Sec.  8.  Be  it  further  enacted^  That  the  corporation  shall 
have  a  lien  upon  the  property  insured  to  secure  the  payment 
of  all  such  assessments  and  calls  as  may  be  legally  made 
under  the  contract  of  insurance  or  by-laws  of  the  company, 
and  that  it  may  maintain  an  action  against  any  member 
thereof  to  recover  all  assessments  which  he  may  neglect  or 
refuse  to  pay  when  due,  made  upon  him  under  the  provi- 
sions of  this  Act  or  the  by-laws-  of  the  corporation.  If  the 
corporation  is  compelled  to  bring  such  action  to  collect  any 
such  assessment,  it  may  recover  the  amount  so  assessed,  to- 
gether with  reasonable  attorney's  fees  and  all  other  costs  of 
collection. 

Sec.  9.  Be  it  further  enacted,  That  any  member  who  re- 
fuses or  neglects  to  pay  his  assessment  may,  for  such  rea- 
son, or  for  any  other  reason  satisfactory  to  the  directors  or 
executive  committee,  be  excluded  by  a  majority  of  the  di- 
rectors or  executive  committee,  or  as  the  by-laws  may  pre- 
scribe, from  the  corporation;  and  when  thus  excluded  the 
secretary  shall  cancel  or  withdraw  his  policy  or  policies, 
which  shall  prevent  his  recovering  from  any  loss  or  damage 
sustained  after  such  exclusion.  Such  member  shall  remain 
liable  for  the  payment  of  any  assessment  made  prior  to 
his  exclusion  and  for  the  penalty  above  provided,  in  case 
such  action  has  been  or  shall  be  brought  against  him  there- 
for within  twelve  months  after  the  time  it  was  due.  If  any 
member  of  the  corporation  shall  be  excluded  therefrom  as 
herein  provided,  and  his  insurance  cancelled,  the  secretary 
shall  at  once  enter  the  same,  with  the  date  thereof,  upon 
the  records  of  the  corporation,  and  either  in  person  or  by 
mail  notify  the  member  of  such  exclusion  and  cancellation 
of  his  insurance;  and,  if  by  mail,  the  postage  shall  be  pre- 
paid and  the  notice  addressed  to  him  at  his  last  postoffice 
address  given  on  the  company's  books  of  record. 

Sec.  10.  Be  it  further  enacted.  That  no  such  company 
shall  issue  policies  of  insurance  on  property  located  in  any 


county  in  this  Stale  oilier  ti'.aii  the  county  in  which  il  has  its 
home  office  until  it  has  at  least  $300,000.00  of  insurance  in 
force;  provided,  that  whenever  any  such  company  has  as 
much  as  $300,000.00  of  insurance  in  force  in  its  home  coun- 
ty, it  may  be  authorized  by  the  Insurance  Commissioner 
to  extend  its  operations  to  all  counties  contiguous  thereto ; 
and  whenever  the  amount  of  insurance  in  force  equals 
$1,500,000.00  he  may  authorize  such  company  to  extend  its 
operations  to  counties  contiguous  to  its  home  county  in  the 
second  degree;  and  w^henever  the  amount  of  insurance  in 
force  equals  $2,500,000.00  he  may  authorize  said  company  to 
extend  its  operations  to  such  other  counties  in  the  State  as 
he  may  designate;  provided,  nothing  in  this  Act  shall  pre- 
vent any  such  existing  company  from  continuing  its  opera- 
tions in  an}^  county  in  which  it  is  now  doing  business. 

Sec.  II.  Be  it  fiirflier  eiiaetcd,  That  such  companies  are 
authorized  to  accumulate'  a  surplus  or  emergency  fund  in 
such  amount  as  may  be  deemed  advisable  by  its  board  of 
directors. 

Sec.  12.  Be  it  further  enacted,  That  it  shall  be  the  duty 
of  the  board  of  directors  to  notify  all  policyholders  of  the 
time  and  place  of  the  annual  meeting  of  said  policyholders, 
either  by  printing  same  on  their  policies  or  by  special  notice, 
and  to  report  to  such  annual  meeting  all  matters  pertaining 
to  the  operation  of  the  company,  and  at  said  annual  meet- 
ing the  board  of  directors  shall  be  elected,  and  such  other 
business  may  be  transacted  by  the  policyholders  as  may  le- 
gally come  before  them.  Every  policyholder  in  good  stand- 
ing shall  be  entitled  to  one  vote,  in  person  or  by  ballot  trans- 
mitted by  mail,  as  may  be  provided  by  by-law,  in  any  elec- 
tion for  directors  or  upon  any  other  question.  Xo  member 
shall  be  allowed  to  vote  by  proxy. 

Sec.  13.  Be  it  further  enacted.  That  immediately  after 
the  annual  meeting  of  the  policyholders  the  board  of  direc- 
tors shall  meet  and  transact  any  business  coming  before  it 
and  shall  elect  a  president,  vice-president,  secretary  and 
treasurer  and  such  other  officers  and  employes  as  they  may 


—73— 

deem  necessary.  Regular  meetings  of  the  board  may  be 
held  as  often  as  the  by-laws  may  provide,  and  special 
meetings  may  be  held  at  the  call  of  the  president,  secretary 
or  a  majority  of  the  board  of  directors.  The  board  of  direc- 
tors shall  consist  of  not  less  than  six  and  not  more  than 
fifteen  policyholders,  the  first  board  to  be  elected  one-third 
for  one  year,  one-third  for  two  years,  one-third  for  three 
years;  thereafter  one-third  to  be  elected  each  year  for  a  pe- 
riod of  three  years.  The  president,  vice-president  and  sec- 
retary shall  be  members  of  the  board  of  directors  and  also 
members  of  the  executive  committee,  which  committee  is 
authorized  to  conduct  the  business  of  the  company  under 
the  authority  of  the  board  of  directors. 

Sec.  14.  Be  if  further  enacted,  That  no  officer  or  other 
person  whose  duty  it  is  to  determine  the  character  of  risk 
and  upon  whose  decision  the  application  shall  finally  be  ac- 
cepted or  rejected  shall  receive  as  any  part  of  his  compensa- 
tion a  commission  upon  the  premium,  but  his  compensation 
shall  be  a  fixed  salary,  or  such  share  of  the  net  profits  of  the 
corporation  as  the  directors  may  determine. 

Sec.  15.  Be  it  further  enacted,  That  the  maximum 
amount  carried  on  any  one  risk  or  hazard  subject  to  one 
fire  by  any  company  shall  not  exceed  the  amount  pre- 
scribed in  the  following  schedule: 

Amount  of  Insurance  in  Force.  Maximum  Risk. 

When   under  $100,000  00 $   1,000  00 

When    $100,000  00  and  under    $250,000  00.  .  .  .  1.500  00 

When      250,000  00  and  under      400,000  00.  . .  .  2,000  00 

When      400.000  00  and  under      600.000  00.  .  .  .  3.000  00 

When      600,000  00  and  under      900.000  00.  . .  .  4.000  00 

When      900.000  00  and  under  1.200,000  00.  .  .  .  5.000  00 

When  1.200,000  00  and  under  1,500,000  00.  .  .  .  5.500  00 

When  1,500.000  00  and  under  2.000.000  00.  . .  .  6.000  00 

When  2,000,000  00  and  under  2,500,000  00.  .  .  .  7,000  00 

When  2,500,000  00  and  under  3,000,000  00.  . .  .  8,000  00 

When  3,000,000  00  and  under  3.500,000  00.  . .  .  9.000  00 

When  3,500,000  00  and  over 10,000  00 


—74— 

The  insurance  contracts  of  all  such  companies  shall  be 
made  to  conform  to  the  provisions  of  this  Act,  and  shall  con- 
sist of  the  policy  proper,  constitution  and  by-laws  of  the 
company  (which  must  be  attached  to  or  incorporated  in  the 
policy),  all  endorsements  made  on  or  attached  to  the  policy, 
such  parts  of  the  application  as  are  attached  to  or  incorpo- 
rated in  the  insurance  contract,  and  any  premium  note  or 
other  policy  obligation  given  by  a  member,  all  of  which  shall 
be  binding  on  the  assured  as  long  as  he  remains  a  member  or 
policyholder  in  the  company. 

Sec.  i6.  Be  it  further  enacted.  That  the  dividends  to 
policyholders  may  be  paid  annually,  or  as  the  directors  may 
determine,  but  the  per  cent  of  dividends  shall  not  be  so 
large  as  to  require  the  payment  during  any  calendar  year  of 
more  than  fifty  per  cent  of  the  net  cash  surplus  at  the  be- 
ginning of  that  year. 

Sec.  17.  Be  it  further  enacted.  That  no  policyholder  shall 
be  liable  to  assessments  to  pay  losses  and  expenses  accruing 
previous  to  the  time  his  policy  takes  effect,  nor  for  losses 
and  expenses  accruing  after  his  policy  terminates. 

Sec.  18.  Be  it  further  enacted,  That  every  such  company 
shall  be  examined  by  the  Insurance  Commissioner  or  some 
other  person  appointed  by  him  at  least  once  in  three  years, 
and  oftener  if  he  deems  it  necessary,  at  the  company's  ex- 
pense. He  shall  have  free  access  to  the  books,  papers  and 
records  of  the  corporation,  and  is  authorized  to  examine 
members,  officers  and  employes  of  the  corporation  under 
oath  touching  any  matters  pertaining  to  the  operation  of  the 
corporation. 

Sec.  19.  Be  it  further  enacted.  That  every  company 
operating  under  this  Act  shall  make  an  annual  report  to  the 
Insurance  Commissioner  on  December  31  of  each  year,  on 
such  form  as  he  shall  prescribe,  and  under  the  same  re- 
quirements as  are  made  of  stock  fire  insurance  companies 
doing  business  in  this  State,  and  shall  pay  the  Insurance 
Commissioner  a  fee  of  $10.00  at  the  time  of  filing  its  annual 
statement. 


—75— 

Sec.  20.  Be  it  further  enacted.  That  Chapter  220,  Acts 
of  1895,  passed  May  13  and  approved  May  14,  1895,  entitled 
"An  Act  to  govern  and  regulate  the  business  of  mutual  or 
assessment  fire  insurance  companies  organized  or  incorpo- 
rated under  the  laws  of  this  State,"  be,  and  the  same  is  here- 
by, repealed,  and  all  other  laws  in  conflict  with  this  Act  be, 
and  the  same  are  hereby,  repealed  in  so  far  as  they  relate  to 
this  class  of  companies. 

Sec.  21.  Be  it  further  enacted.  That  this  Act  shall  take 
effect  from  and  after  its  passage,  the  public  welfare  requir- 
ing it. 

Passed  April  10,  1907. 

Approved  April  15,  1907. 


-76- 


STATE  MUTUAL  FIRE  INSURANCE 
COMPANIES. 


CHAPTER  461,  ACTS  OF   1907. 

AN  ACT  to  authorize  the  organization  and  regulation  of 
State  Mutual  Fire  Insurance  Companies  to  be  operated 
on  the  mutual  plan,  and  to  repeal  Chapter  220  of  the 
Acts  of  1895. 

Section  i.  Be  if  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  every  Mutual  Fire  Insurance 
Company  organized  and  incorporated  under  the  laws  of 
this  State  and  operating  under  the  provisions  of  this  Act, 
before  commencing  business,  must  file  with  the  Insurance 
Commissioner  a  statement  signed  and  sworn  to  by  three  of 
its  incorporators,  that  it  has  bona  Ude  applications  for  not 
less  than  two  hundred  and  fifty  thousand  dollars  ($250,- 
000.00)  of  insurance  on  not  less  than  two  hundred  and 
fifty  separate  risks  in  this  State,  to  be  bound  simultaneously, 
before  [upon]  the  filing  of  said  sworn  statement,  if  the  In- 
surance Commissioner  is  satisfied  with  the  bona  fides  of  the 
application,  he  shall  then  issue  the  company  a  certificate  of 
authority  to  do  a  fire,  lightning  and  tornado  insurance  busi- 
ness under  the  provisions  of  this  Act. 

False  swearing  to  the  above  statement  shall  be  deemed 
perjury  and  upon  conviction  thereof,  those  who  committed 
it  shall  be  punished  as  in  other  cases  of  perjury,  and  the 
company  in  whose  interest  the  false  statement  is  made  shall 
be  denied  the  right  to  do  business  for  twelve  months  there- 
after ;  and  if  a  certificate  of  authority  be  obtained  thereby 
for  such  company,  it  shall  be  revoked  by  the  Insurance 
Commissioner  and  the  company  prohibited  from  doing  busi- 
ness for  twelve  months  next  after  the  discovery  of  said 
false  statement. 

Sec.  2.    Be  it  further  enacted,  That  in  lieu  of  the  amount 


—77— 

of  applications  and  insurance  applied  for,  mentioned  in  the 
foregoing  section,  any  mutual  fire  insurance  company  or- 
ganized under  the  laws  of  this  State  may  have  a  paid-up 
guaranty  capital  of  not  less  than  twenty-five  thousand  dol- 
lars ($25,000.00),  divided  into  shares  of  not  exceeding 
one  hundred  dollars  ($100.00)  each.  This  capital  and  the 
other  invested  aesets  of  the  company  shall  be  invested  in 
real  estate  mortgages  or  mortgage  notes,  not  exceeding 
one-half  of  the  value  of  the  property,  or  in  such  other  secu- 
rities as  domestic  stock  fire  insurance  companies  are  per- 
mitted to  invest  their  funds  in. 

Said  guaranty  capital  securities  must  be  deposited  with 
the  Insurance  Commissioner,  or  with  some  trust  company  or 
bank  in  the  company's  home  county  authorized  to  act  as 
trustee,  under  the  direction  and  control  of  the  Insurance 
Commissioner,  in  trust  for  the  protection  of  the  policy- 
holders of  such  company  and  for  the  payment  of  its  losses 
and  policy  liabilities.  When  said  guaranty  capital  securi- 
ties have  been  so  deposited,  the  Insurance  Commissioner 
shall  authorize  such  company  to  do  a  fire,  lightning  and 
tornado  insurance  business  under  the  provisions  of  this  Act. 

Sec.  3.  Be  it  further  enacted.  That  every  such  company 
organized  with  a  guaranty  capital  may  allow  the  subscribers 
thereto  all  the  interest  and  dividends  accruing  from  the 
guaranty  capital  securities,  according  to  the  amount  paid 
in  or  deposited  by  the  respective  guarantors,  and  in  addi- 
tion thereto  may  pay  such  guarantors  dividends  of  not 
exceeding  6  per  cent  per  annum  on  their  respective  paid  up 
shares ;  provided  that  the  surplus  at  the  end  of  each  year, 
over  and  above  all  liabilities,  including  reinsurance  reserve 
and  guaranty  capital,  is  sufficient  to  pay  the  said  dividends. 

Sec.  4.  Be  it  further  enacted,  That  all  such  companies 
operating  under  the  guaranty  capital  provisions  of  this  Act 
and  levying  advance  premiums  and  maintaining  a  full  legal 
reinsurance  reserve,  may  limit  their  policyholders'  liability 
to  the  amount  of  premiums  stated  in  the  policy  or  insurance 
contract,  and  collect  the  same  as  set  out  therein. 


-78- 

Should  the  guaranty  capital  of  any  such  company  at 
any  time  become  impaired  and  remain  so  for  sixty  days, 
the  company  shall  cease  issuing  policies  until  said  impair- 
ment is  made  good  by  either  replacing  the  funds  due  said 
guaranty  capital,  or  by  reducing  the  authorized  amount  of 
same  by  written  notice  to  the  Insurance  Commissioner  by 
an  amount  equal  to  the  impairment,  but*  in  no  event  to 
less  than  twenty-five  thousand  dollars  ($25,000.00),  but 
the  company  may  continue  to  collect  premiums  that  are 
due  or  [to  be]  become  due  on  policies  already  in  force  while 
the  impairment  exists  and  until  it  is  made  good.  Such  com- 
pany may  at  any  time  use  any  surplus  over  and  above  all 
liabilities,  including  reinsurance  reserve,  for  the  purpose  of 
retiring  or  liquidating  any  part  of  its  guaranty  capital.  All 
of  said  guaranty  capital  shall  be  retired  when  an  equal 
amount  of  net  surplus  shall  have  been  accumulated. 

If  a  guarantor  desires  to  surrender  his  shares  and  with- 
draw his  guaranty  capital  or  securities,  he  may  do  so  in 
giving  the  company  ninety  days  written  notice  to  that 
effect ;  provided  such  v/ithdrawal  does  not  impair  the  com- 
pany's guaranty  capital  below  $25,000.00. 

When  said  guaranty  capital  is  being  retired  or  liquidated, 
if  the  guarantors  have  made  their  contributions  in  cash, 
a  like  amount  of  cash  shall  be  repaid  them,  but  if  the  same 
has  been  made  in  securities,  said  securities,  if  undisposed 
of  or  their  cash  value  at  the  time  of  their  sale  if  disposed 
of,  shall  be  returned  to  the  guarantor  contributing  same, 
or  the  return  of  the  guaranty  capital  shall  be  made  on  such 
other  terms  as  are  agreed  upon  when  the  securities  are  de- 
posited by  the  guarantor.  When  computing  reinsurance  re- 
serve, policy  fees,  membership  and  endorsement  fees,  all 
agents  commissions,  and  salaries  of  all  agents  required  to 
have  a  certificate  of  authority  from  the  Insurance  Depart- 
ment, shall  be  excluded  as  a  part  of  the  premiums  receipts. 
The  unpaid  premiums  in  course  of  collection  and  unpaid 
premium  notes  of  the  policyholders,  not  over  twelve  months 
due,  shall  be  treated  as  ledger  assets. 

Sec.  5.  Be  it  further  enacted,  That  all  companies  oper- 


—79— 

ating  under  this  Act,  and  not  maintaining  a  twenty-five 
thousand  dollar  ($25,000.00)  guaranty  capital  or  more,  and 
a  full  legal  reinsurance  reserve,  exclusive  of  all  other  lia- 
bilities, shall  charge  one  full  regular  annual  or  term  pre- 
mium for  each  policy  issued  and  collect  the  same  at  such 
times  and  under  such  conditions  as  the  insurance  contract 
provides  for;  and  the  assured  or  policyholders  shall  be 
liable  for  a  contingent  premium  equal  to  and  in  addition 
to  the  regular  premium,  if  needed  by  the  company  for  the 
purpose  of  paying  its  losses  and  other  liabilities.  If  any 
such  company  so  desire  it  may  make  provisions  in  its  in- 
surance contract  for  assessments  in  addition  to  the  one 
contingent  premium,  which  is  herein  made  mandatory. 

The  amount  of  the  regular  premium  and  the  contingent 
premium  shall  be  plainly  written  on  the  outside  or  title  page 
of  the  policy,  and  it  shall  be  plainly  stated  in  the  policy 
or  insurance  contract  that  it  is  issued  in  consideration  of 
the  regular  premium  and  the  further  contingent  premium 
of  not  less  than  the  same  amount  in  addition  thereto.  The 
contingent  liabilities  of  the  policyholders  shall  be  computed 
as  contingent  assets  of  the  company.  The  unpaid  regular 
premium  and  premium  notes  of  the  policyholders  not  over 
twelve  months  due  shall  be  computed  as  ledger  assets  of 
the  company. 

No  policyholder  shall  be  liable  for  any  amount  in  ex- 
cess of  the  regular  premium  and  contingent  premium  as 
herein  provided  for  and  required  to  be  stated  in  the  policy 
or  insurance  contract,  nor  shall  any  policyholder  be  liable 
for  losses  or  expenses  accruing  before  his  policy  was  issued, 
nor  for  losses  or  expenses  accruing  after  the  termination 
of  his  insurance. 

Every  company  operating  under  the  provisions  of  this 
Act  shall  have  a  lien  upon  the  property  insured  to  secure 
the  payment  of  all  regular  premiums,  contingent  premiums 
and  other  policy  obligations,  due  the  company;  and  if  the 
company  be  compelled  to  collect  such  premium  or  obligation 
by  suit,  or  through  a  collecting  attorney,  the  assured  shall 


— 8o— 

be  liable  for  all  costs  incident  to  such  proceeding,  includ- 
ing reasonable  attorney's  fee. 

Sec.  6.  Be  it  further  enacted.  That  every  policyholder  in 
good  standing,  of  any  company  doing  business  under  this 
Act,  shall  have  one  vote  at  the  election  of  the  Board  of  Direc- 
tors. They  may  vote  either  in  person  or  by  prox3\  Guar- 
antors in  a  guaranty  capital  company  shall  have  one  vote 
each  for  each  of  their  respective  paid-up  shares.  They 
may  vote  either  in  person  or  by  proxy.  Not  less  than  two- 
thirds  of  the  directors  in  any  such  company  shall  be  resi- 
dents of  Tennessee.  No  person  not  a  policyholder  or  guar- 
antor shall  be  eligible  to  hold  any  principal  office  or  be  a 
director  in  any  such  company. 

Sec.  7.  Be  it  further  enacted,  That  no  officer  or  other 
person,  whose  duty  it  is  to  determine  the  character  of  the 
risk  and  upon  whose  decision  the  application  for  insurance 
thereon  shall  finally  be  accepted  or  rejected,  shall  receive 
as  any  part  of  his  compensation  any  commission  upon  the 
premium,  but  his  compensation  shall  be  a  fixed  salary,  fee, 
or  such  part  of  the  net  profits  of  the  company  as  the  Board 
of  Directors  may  determine. 

Sec.  8.  Be  it  further  enacted,  That  the  maximum  amount 
carried  by  any  such  company  or  [on]  any  one  or  more  risks 
reasonably  subject  to  one  fire,  shall  not  exceed  the  amounts 
prescribed  in  the  following  schedule,  when  under  the  pro- 
tection of  a  full  paid  fire  department,  [but]  not  exceeding 
three-fifths  that  amount  [when]  not  under  the  protection  of 
a  full  paid  fire  department : 

Amount  of  insurance  in  force.  Maximum  line  (amount). 

When  under  $400,000 $  2,000 

$400,000  and  under  $600,000 3,ooo 

$600,000  and  under  $900,000 4,000 

$900,000  and  under  $1,200,000 5.000 

$1,200,000  and  under  $1,500,000 5>5CO 

$1,500,000  and  under  $2,000,000 6,000 

$2,000,000  and  under  $2,500,000 7,000 

$2,500,000  and  under  $3,000  000 8,000 


— 8i— 

$3,000 ,('0C  and  under  $3,500,000 9,000 

$3,500,000  and  under  $5,000,000 10,000 

$5,000,000  and  over J2.5'.xd 

All  amounts  in  excess  of  the  above  shall  be  reinsured 
concurrently  with  its  writing.  No  company  doing  business 
under  this  Act  shall  reinsure  any  of  its  business  in  any  un- 
authorized company  except  upon  the  written  approval  of 
the  Insurance  Commissioner  of  this  State.  Such  company 
shall  pay  2^  per  cent  tax  on  the  premium  on  all  business 
it  reinsures  in  companies  not  having  their  domicile  in  this 
State,  at  the  same  time  foreign  fire  insurance  companies 
are  required  to  pay  the  tax  on  their  premium. 

The  insurance  contracts  of  all  such  companies  shall  be 
made  to  conform  to  the  provisions  of  this  Act,  and  shall 
consist  of  the  policy  "proper;  the  constitution  and  by-laws 
of  the  company,  which  must  be  attached  to  or  printed  on  the 
policy;  all  endorsements  made  on  or  attached  to  the  policy; 
such  parts  of  the  application  as  are  attached  to  or  incor- 
ported  in  the  insurance  contract;  and  any  premium  note  or 
other  policy  obligation  given  by  the  assured;  all  of  which 
shall  be  binding  on  the  assured  as  long  as  he  remains  a 
member  of  or  policyholder  in  the  company. 

Sec.  9.  Be  it  further  enaetcd,  That  dividends  in  cash,  or 
otherwise,  may  be  paid  to  policyholders  annually,  or  at  such 
times  as  the  directors  may  decide  upon,  the  per  cent  of  divi- 
dend to  be  paid  shall  be  fixed  from  time  to  time  by  the 
Board  of  Directors,  and  their  action  shall  be  final  both  as 
to  the  per  cent  of  dividend  and  the  time  when  it  shall  be 
paid  to  the  policyholder.  The  per  cent  of  dividend  shall 
be  the  same  to  all*  in  each  class  of  policyholders,  but  shall 
not  be  so  large  as  to  require  the  payment  for  any  calendar 
year  of  more  than  50  per  cent  of  the  company's  net  cash 
surplus  at  the  close  of  that  year. 

Sec.  10.  Be  it  further  enacted,  That  the  deposits  and 
investments  of  every  such  company  shall  be  made   in   its 

6 


—82- 


corporate  name;  and  no  officer  of  the  company,  or  member 
of  any  committee  thereof  charged  with  the  investment  of 
funds,  shall  borrow  the  same,  or  be  directly  or  indirectly 
liable  therefor,  for  or  on  account  of  loans  made  to  others, 
nor  shall  any  director  or  any  officer  take  or  receive  to  his 

use  any  fee,  brokerage,  commission,  gift  or  other  considera- 
tion on  account  of  any  loan  made  by  or  on  behalf  of  any 
such  company;  provided  this  does  not  prevent  such  persons 
subscribing  for  or  securing  shares  of  guaranty  capital  in 
any  company  operating  on  the  guaranty  capital  plan,  on 
equal  terms  and  conditions  with  other  guarantors. 

The  violation  of  this  section  shall  be  a  misdemeanor  and 
any  one  convicted  thereof  shall  be  fined  not  less  than  $50,00 
nor  more  than  $200.00. 

Sec.  II.  Be  it  further  enacted,  That  every  such  com- 
pany shall  be  required  to  obtain  from  the  Insurance  Com- 
missioner a  certificate  of  authority  for  each  of  its  agents 
who  solicit  or  write  insurance  in  this  State  the  fee  for  which 
shall  be  $2.00. 

Every  such  company  shall  make  an  annual  report  to  the 
Insurance  Commissioner  by  February  ist  of  each  year,  as  of 
December  31st  of  the  preceding  year,  on  blank  forms  pre- 
pared and  furnished  by  him  for  that  purpose,  setting  forth 
the  transactions  of  the  company  during  the  previous  year, 
showing  its  condition  at  the  close  of  the  year,  and  shall 
pay  to  the  Insurance  Commissioner  a  fee  of  $10.00  there- 
for at  the  time  of  filing  the  statement. 

Sec.  12.  Be  it  further  enacted,  That  when  the  Insurance 
Commissioner  is  satisfied  that  any  such  company  has  ex- 
ceeded its  powers,  or  has  failed  to  comply  with  the  pro- 
visions of  this  law,  or  is  conducting  its  business  fraudu- 
lently, or  in  his  judgment  its  financial  condition  is  unsound, 
or  that  it  is  not  maintaining  the  required  amount  of  net 
surplus  or  unimpaired  guaranty  capital  and  reserve,  it  shall 
be  his  duty  to  present  the  facts  relating  thereto  to  the  State 
Attorney  General,  who  shall,  if  he  deems  the  circumstances 


-83- 

warrant,  commence  an  action  in  quo  zvarranto  or  an  action 
of  that  nature,  in  any  court  of  competent  jurisdiction  near- 
est to  the  company's  domicile;  and,  if  upon  the  trial,  such 
court  shall  find  that  the  allegations  in  the  petition  are  true, 
and  that  legal  grounds  exist  therefor,  such  company  shall 
be  enjoined  from  doing  further  business;  provided  that 
such  company  shall  have  reasonable  notice  served  upon  it 
by  the  Insurance  Commissioner  and  given  reasonable  oppor- 
tunity and  time  to  show  cause  why  such  proceedings  should 
not  be  commenced  and  to  make  good  any  impairment  in 
its  guaranty  capital,  or  reserve.  And  whenever,  in  the 
opinion  of  such  court,  such  company  should  not  be  per- 
mitted longer  to  transact  business,  it  shall  appoint  a  re- 
ceiver for  the  purpose  of  winding  up  its  business,  as  in 
other  cases  of  receivership  in  this  State. 

Sec.  13.  Be  it  further  enacted.  That  any  company  organ- 
ized and  now  operating  under  Chapter  220  of  the  Acts  of 
1895,  which  desires  to  do  so,  may  accept  and  operate  under 
the  provisions  of  this  Act,  and  such  company  shall  have 
until  January  i,  1908,  in  which  to  avail  itself  of  this  privi- 
lege. 

Sec.  14.  Be  it  further  enacted,  That  Chapter  220  of  the 
Acts  of  1895,  entitled  "An  Act  to  govern  and  regulate  the 
business  of  mutual  or  assessment  and  fire  insurance  com- 
panies organized  or  incorporated  under  the  laws  of  this 
State,"  be  and  the  same  is  hereby  repealed  in  so  far  as  it 
applies  to  this  class  of  companies,  and  that  all  other  laws  or 
parts  of  laws  in  so  far  as  they  conflict  with  this  Act,  be 
and  the  same  are  hereby  repealed. 

Sec.  15.    Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  10,  1907. 
Approved  April  15,  1907. 


-84- 


ADMISSION   OF   FOREIGN   MUTUAL 
FIRE  INSURANCE  COMPANIES. 


CHAPTER  462,  ACTS  OF  1907. 

AN  ACT  to  provide  for  the  admission  and  regulation  of 
mutual  fire  insurance  companies  incorporated  under  the 
laws  of  other  States. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee^  That  mutual  fire  insurance  companies 
incorporated  and  organized  under  the  laws  of  other  States 
shall  not  be  permitted  to  do  business  in  this  State  until  they 
have  received  a  certificate  of  authority  from  the  Insurance 
Commissioner,  stating  that  such  company  has  complied  with 
the  provisions  of  this  Act. 

Sec.  2.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner shall  not  license  or  authorize  any  mutual  fire  in- 
surance company  incorporated  under  the  laws  of  any  other 
State  to  transact  the  business  of  fire  insurance  in  this  State 
until — 

1.  It  shall  file  with  him  a  certified  copy  of  its  charter  or 
articles  of  incorporation  and  a  statement  of  its  financial  con- 
dition and  business  on  the  31st  day  of  December  preceding 
the  day  on  which  it  shall  apply  for  admission  to  transact 
business,  in  such  form  and  detail  as  the  Insurance  Com- 
missioner may  require,  the  same  to  be  signed  and  sworn  to 
by  its  president  and  secretary,  or  other  proper  officers,  and 
shall  pay  for  the  filing  of  such  copy  and  statement  the  sum 
of  thirty  dollars  ($30.00). 

2.  It  shall  also  file  with  the  Insurance  Commissioner  a 
certificate  from  the  Insurance  Commissioner  of  its  home 
State,  stating  that  it  is  duly  organized  under  the  laws  of  such 
State  and  authorized  to  do  the  business  of  fire  insurance  in 
such  State,  and  also  the  amount  of  its  actual  and  contingent 


-85- 

i 

assets  and  the  amount  of  its  quarterly  [guaranty]  capital,  if 

any. 

3.  It  shall  appoint  the  Insurance  Commissioner  of  this 
State  its  lawful  attorney,  upon  whom  all  lawful  process  in 
any  action  or  legal  proceeding  against  it  may  be  served,  on 
a  form  prescribed  by  the  Insurance  Commissioner,  as  re- 
quired of  stock  fire  insurance  companies  of  other  States 
admitted  to  do  business  in  this  State. 

Sec.  3.  Be  it  further  enacted,  That  whenever  any  such 
mutual  fire  insurance  company  has  complied  with  the  pro- 
visions of  this  Act  and  has  satisfied  the  Insurance  Com- 
missioner that  it  is  safe  and  solvent,  it  shall  be  the  duty 
of  the  Insurance  Commissioner  to  license  such  company  to 
do  business  in  this  State. 

Sec.  4.  Be  it  further  enacted,  That  every  such  mutual 
fire  insurance  comany  in  order  to  do  business  in  this  State 
must  have  and  maintain  in  admitted  assets  over  and  above 
liabilities,  including  its  reinsurance  reserve,  of  not  less  than 
fifty  thousand  dollars  ($50,000.00)  ;  and  in  addition  it  must 
have  and  maintain  contingent  assets  of  not  less  than  one 
hundred  and  fifty  thousand  dollars  ($150,000.00),  or  in  lieu 
of  the  above  it  must  have  and  maintain  a  net  cash  surplus 
of  not  less  than  one  hundred  thousand  dollars  ($100,000.00). 
Contingent  assets  are  defined  to  mean  the  amount  of  the 
policyholder's  liability  for  any  unpaid  premiums  or  assess- 
ments. 

Sec.  5.  Be  it  further  enacted.  That  all  such  companies 
operating  under  the  provisions  of  this  Act  must  have  and 
maintain  the  same  reserve  for  reinsurance  of  outstanding 
policies  that  is  required  of  stock  fire  insurance  companies 
doing  business  in  this  State. 

Sec.  6.  Be  it  further  enacted.  That  all  such  companies 
operating  under  the  provisons  of  this  Act,  shall  make  an- 
nual reports  to  the  Insurance  Commissioner  in  such  form 
as  the  Insurance  Commissioner  shall  prescribe  and  as  re- 
quired of  stock  fire  insurance  companies  doing  business  in 


—86— 

this  State,  and  shall  pay  the  same  fees  for  filing  annual 
statement  and  renewal  of  license  as  stock  fire  insurance 
companies  now  pay. 

Sec.  7.  Be  it  further  enacted,  That  the  authority  of  any 
such  company  admitted  to  do  business  in  this  State  may  be 
revoked  by  the  Insurance  Commissioner  if  it  shall  violate  or 
neglect  to  comply  with  any  provision  of  law  obligatory  upon 
it,  or  whenever,  in  the  opinion  of  the  Insurance  Commis- 
sioner, its  condition  is  unsound,  or  whenever  it  fails  to  main- 
tain the  amount  of  surplus  or  assets  over  and  above  all 
liabilities  as  required  by  the  provisions  of  this  Act. 

Sec.  8.  Be  it  further  enacted.  That  every  such  company 
licensed  to  do  business  in  this  State  under  the  provisions 
of  this  Act  shall  obtain  from  the  Insurance  Commissioner 
authority  for  every  agent  writing  or  soliciting  insurance 
for  it  in  this  State,  and  such  certificate  shall  be  renewable  as 
provided  by  law  for  agents  of  stock  fire  insurance  companies, 
and  shall  pay  the  same  fees  for  such  certificates  of  authority 
as  are  required  of  stock  companies. 

Sec.  9.  Be  it  further  enacted,  That  each  and  every  com- 
pany doing  business  under  the  provisions  of  this  Act  shall 
pay  the  same  amount  of  taxes  on  its  premiums,  at  the  same 
time  and  in  the  same  manner  as  is  now  required  of  stock 
fire  insurance  [companies]  of  other  States,  and  shall  be  sub- 
ject to  the  same  penalties  for  neglecting  to  comply  with  this 
section. 

Sec.  10.  Be  it  further  enacted.  That  the  Insurance  Com- 
missioner of  this  State  is  authorized  to  examine  any  com- 
pany operating  under  the  provisions  of  this  Act,  either  in 
person  or  by  deputy  appointed  by  him,  and  he  shall  have  as 
full  authority  as  he  now  has  to  examine  any  foreign  insur- 
ance company  authorized  to  do  business  in  this  State. 

Sec.  II.  Be  it  further  enacted.  That  all  laws  and  parts  of 
laws  in  conflict  with  the  provisions  of  this  Act  be,  and  the 
same  are  hereby  repealed,  and  that  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 

Passed  April  10,  1907. 

Approved  April  15,  1907. 


FKATERNAL  ACT. 


CHAPTER  480,  ACTS  OF  1905. 

AN  ACT  to  provide  for  the  organization,  admission  and  regulation 
of  fraternal  beneficiary  associations  transacting  the  business  of 
life  insurance  and  to  repeal  all  laws  in  conflict  with  the  provis- 
ions of  this  Act. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  any  corporation,  society,  order 
or  voluntary  association  without  capital  stock,  organized 
and  carried  on  solely  for  the  mutual  benefit  of  its  members 
and  fheir  beneficiaries,  and  not  for  profit,  and  having  a 
lodge  system  with  ritualistic  form  of  work  and  representa- 
tive form  of  government,  and  which  shall  make  provisions 
for  the  payment  of  death  benefits,  and  which  may  make 
provisions  for  the  payment  of  disability  benefits,  or  both, 
is  hereby  declared  to  be  a  fraternal  beneficiary  association. 

Sec.  2.  Be  it  further  enacted,  That  any  association  hav- 
ing a  supreme  governing  or  legislative  body  and  subordi- 
nate lodges  or  branches,  by  whatever  name  known,  into 
which  members  shall  be  elected,  initiated  and  admitted  in 
accordance  with  its  constitution,  laws,  rules,  regulations  and 
prescribed  ritualistic  ceremonies,  which  subordinate  lodges 
or  branches  shall  be  required  by  such  association  to  hold 
regular  or  stated  meetings  at  least  once  in  each  month, 
shall  be  deemed  to  be  operating  under  the  lodge  system. 

Sec.  3.  Be  it  further  enacted,  That  any  association  shall 
be  deemed  to  have  a  representative  form  of  government 
when  it  shall  provide  in  its  constitution  and  laws  for  a 
supreme  legislative  or  governing  body,  composed  of  repre- 
sentatives elected  either  by  the  members  or  by  delegates 
elected  by  the  members  through  a  delegate  convention  sys- 
tem, together  with  such  other  members  as  may  be  pre- 
scribed by  its  constitution  and  laws,  provided  that  the  elec- 
tive representatives  shall  constitute  a  majority  in  number, 


and  have  not  less  than  a  majority  of  the  vote,  nor  less  than 
the  votes '  required  to  amend  its  constitution  and  laws,  and 
provided,  further,  that  the  meetings  of  the  supreme  or  gov- 
erning body  and  the  election  of  officers,  representatives  or 
delegates  shall  be  held  as  often  as  once  in  four  years.  The 
members,  officers,  representatives  or  delegates  of  a  fraternal 
beneficiary  society  shall  not  vote  by  proxy. 

Sec.  4.  Be  it  further  enacted,  That,  except  as  herein 
provided,  such  association  shall  be  governed  by  this  Act, 
and  shall  be  exempt  from  all  provisions  of  the  insurance 
laws  of  this  State,  not  only  in  governmental  relations  with 
the  State,  but  for  every  other  purpose,  and  no  law  hereafter 
passed  shall  apply  to  them,  unless  they  be  expressly  desig- 
nated therein. 

Sec.  5.  Be  it  further  enacted,  That  every  association 
transacting  business  under  this  Act  shall  provide  for  the 
payment  of  death  benefits,  and  may  provide  for  the  pay- 
ment of  benefits  in  case  of  temporary  or  permanent  physical 
disability,  either  as  the  result  of  disease,  accident  or  old 
age,  provided  the  period  of  life,  at  which  the  payments  of 
benefits  for  disability  on  account  of  old  age  shall  commence, 
shall  not  be  under  seventy  years ;  except  as  otherwise  pro- 
vided in  this  Act,  no  association  shall  issue  or  ofifer,  or 
promise  to  issue,  any  contract  providing  for  the  payment 
of  any  other  benefit,  or  any  contract  which  does  not  pro- 
vide for  the  regular  payments  or  assessments  during  the 
entire  existence  of  the  contract. 

Sec.  6.  Be  it  further  enacted.  That  the  payment  of  death 
benefits  shall  be  confined  to  the  wife,  husband,  family,  rela- 
tives by  blood,  marriage  or  legal  adoption,  affianced  hus- 
band or  affianced  wife,  or  to  a  person  or  persons  dependent 
on  the  member,  subject  to  the  limitation  and  control  of  the 
association  as  to  the  designation  of  beneficiaries  within  said 
classes. 

Sec.  7.  Be  it  further  enacted,  That  no  association  shall 
adrnit  to  beneficial  membership  any  person  less  than  sixteen 
(]6)  nor  more  than  sixty  (60)  years  of  age,  nor  any  per- 
son who  has  not  been  examined  by  a  legally  qualified  prac- 


—89— 

ticing  physician,  and  whose  examination  has  not  been  ap- 
proved by  the  supervising  medical  authority  of  the  asso- 
ciation, as  provided  by  the  laws  of  the  association ;  Provided, 
that  such  examination  shall  not  be  required  of  associations 
paying  death  benefits  not  exceeding  three  hundred  ($300) 
dollars. 

Sec.  8.  Be  it  further  enacted,  That  every  certificate 
issued  by  the  association  shall  specify  the  definite  amount 
of  benefit  provided  by  the  contract,  and  shall  provide  that 
the  certificate,  the  constitution  and  laws  of  the  association 
and  the  application  for  membership  and  medical  examina- 
tion, signed  by  the  applicant,  shall  constitute  the  contract 
between  the  association  and  the  member,  and  copies  of  the 
same,  certified  by  the  secretary  of  the  association  or  corre- 
sponding officer,  shall  be  received  in  evidence  of  the  terms 
and  conditions  of  the  contract ;  and  any  changes,  additions 
or  amendments  to  said  charter  or  articles  of  association, 
constitution  or  laws  duly  made  or  enacted  subsequent  to 
the  issuance  of  the  benefit  certificate  shall  bind  the  member 
and  his  beneficiaries,  and  shall  govern  and  control  the  con- 
tract in  all  respects  the  same  as  though  such  changes,  addi- 
tions or  amendments  had  been  made  prior  to  and  were  in 
force  at  the  time  of  the  application  for  membership ;  Pro- 
vided,  hoivcver.  That  the  constitution  and  laws  of  any  asso- 
ciation shall  never  be  amended  or  in  any  way  altered  ex- 
cept by  the  supreme  legislative  or  governing  body  in  a 
regular  or  special  meeting  called  for  that  purpose,  and  no 
amendment  to  the  constitution  and  laws  shall  in  any  way 
afifect  the  rights  of  any  beneficiary  whose  claim  accrued  by 
death  or  otherwise  prior  to  the  passage  of  such  amend- 
ment. 

Sec.  9.  Be  it  further  enacted,  That  any  association  may 
create,  maintain,  invest,  disburse  and  apply  a  reserve,  emer- 
gency, surplus  or  other  fund  in  accordance  with  its  consti- 
tution and  laws  for  the  purposes  specified  in  Section  5  of 
this  Act.  Any  such  association  so  creating,  maintaining, 
investing,  disbursing  or  applying  any  such  reserve,  emer- 
gency or  surplus  funds,  shall  not  be  held  to  be  organized  or 


— 90— 

carried  on  for  profit  within  the  intent  of  the  provisions  of 
Section  i  of  this  Act.  Such  funds  shall  be  held,  invested 
and  disbursed  for  the  use  and  benefit  of  the  association, 
and  no  member  or  beneficiary  shall  have  or  acquire  any  in- 
dividual rights  therein,  or  be  entitled  to  an  apportionment 
or  the  surrender  of  any  part  thereof.  The  funds  from 
which  benefits  shall  be  paid  and  the  funds  from  which  the 
expenses  of  the  association  shall  be  defrayed,  shall  bo  de- 
rived from  periodical  or  other  payments  by  the  members 
of  the  association  and  accretions  of  said  funds ;  Provided, 
That  regular  periodical  payments  shall  not  be  made  oftener 
than  once  per  month;  and  every  such  association  shall  pro- 
vide in  its  constitution  or  laws  that  if  such  regular  pay- 
ments are  insufficient  to  pay  all  matured  death  and  dis- 
ability claims  in  full,  and  to  provide  for  the  creation  and 
maintenance  of  the  funds  required  by  its  constitution  and 
laws,  extra  assessments  or  other  payments  may  be  levied 
upon  the  members  to  meet  such  deficiency. 

Sec.  id.  Be  it  further  enacted,  That  any  association  may 
invest  its  funds  in  and  hold  real  estate  for  lodge  and  office 
purposes,  and  any  real  estate  acquired  by  foreclosure  or  re- 
ceived in  satisfaction  of  loans,  and  may  sell  and  convey  the 
same.  Any  such  association  may  also  invest  its  funds  in 
government,  State,  provincial,  county,  or  municipal  bonds, 
or  bonds  of  any  township,  park,  or  school  district  haying 
taxing  powers ;  Provided,  That  such  bonds  shall  be  a  direct 
obligation  on  all  the  taxable  property  within  such  municipal- 
ity or  district,  and  the  net  indebtedness  of  such  municipality 
or  district  shall  not  exceed  five  (5)  per  centum  of  the  value 
of  all  taxable  property  therein,  according  to  the  last  valua- 
tion for  taxation  preceding  the  issuance  of  said  bonds,  or  in 
first  mortgages  or  first  mortgage  bonds  upon  improved  real 
estate  for  not  exceeding  fifty  (50)  per  centum  of  the  actual 
cash  value  thereof  at  the  time  of  making  the  loan ;  Provided, 
however,  That  every  foreign  association  shall  be  empowered 
to  invest  its  funds  in  such  securities  as  may  be  permitted 
by  the  laws  of  the  State,  province,  or  county  [country]  in 
which  it  is  organized. 


—91— 

Sec.  II.  Be  it  further  enacted,  That  every  association 
shall  make  provision  in  its  constitution  and  laws  for  pay- 
ment by  members  of  such  an  association,  which  provision 
shall  state  the  purpose  of  the  same,  and  the  proportion 
thereof  which  may  be  used  for  expenses,  and  no  part  of  the 
money  collected  for  mortuary  or  disability  purposes,  and  no 
part  of  the  reserve,  emergency,  or  surplus  funds  or  the  net 
accretions  of  either  or  any  of  said  funds,  shall  be  used  for 
expenses. 

Sec.  12.  Be  it  further  enacted,  That  the  money  or  other 
benefits,  charity,  relief,  or  aid  to  be  paid,  provided,  or  ren- 
dered by  any  association  authorized  to  do  business  under 
this  Act,  shall,  neither  before  nor  after  being  paid,  be 
liable  to  attachment,  garnishment,  or  other  process,  and 
shall  not  be  seized,  taken,  appropriated,  or  applied  by  any 
legal  or  equitable  process  or  operation  of  law  to  pay  any 
debt  or  liability  of  a  certificate  holder,  or  of  any  beneficiary 
named  in  a  certificate,  or  of  any  person  who  may  have  any 
right  thereunder;  such  associations  are  hereby  declared  to 
be  charitable  institutions,  and  the  property  held  and  used 
for  lodge  purposes  and  the  funds  of  such  associations  shall 
be  exempt  from  taxation  under  the  general  tax  or  revenue 
laws  of  the  State. 

Sec.  13.  Be  it  further  enacted.  That  five  or  more  per- 
sons, citizens  of  this  State,  who  desire  to  form  a  fraternal 
or  beneficiary  association,  as  defined  by  this  Act,  may  take 
out  a  charter  in  the  way  and  manner  provided  by  law  in 
which  shall  be  stated: 

First — The  proposed  corporate  name  of  the  association, 
which  shall  not  so  closely  resemble  the  name  of  any  asso- 
ciation or  insurance  company  already  transacting  business 
in  this  State  as  to  mislead  the  public  or  lead  to  confusion. 

Second — The  purpose  for  which  it  is  formed,  which  shall 
not  include  more  liberal  powers  than  are  granted  by  this 
Act,  provided  that  any  lawful,  social,  intellectual,  educa- 
tional, moral,  or  religious  advantages  may  be  set  forth 
among  the  purposes  of  the  association,  and  the  mode  in 
which  its  corporate  powers  are  to  be  exercised. 


—92— 

Third — The  names,  residences,  and  official  titles  of  all 
the  officers,  trustees,  directors,  or  other  persons  who  are 
to  have  and  exercise  the  general  control  and  management 
of  the  affairs  and  funds  of  the  association  for  the  first  year, 
or  until  the  ensuing  election,  at  which  all  such  officers  shall 
be  elected  by  the  supreme  legislative  or  governing  body. 

Such  articles  of  association  and  duly  certified  copies  of 
the  constitution  and  laws,  rules,  and  regulations,  and  copies 
of  all  proposed  forms  of  benefit  certificates,  applications 
therefor,  and  literature  to  be  issued  by  such  association,  and 
a  bond  in  the  sum  of  five  thousand  dollars,  with  sureties 
approved  by  the  Insurance  Commissioner,  conditioned  upon 
the  return  of  the  advanced  payments,  as  provided  in  this 
section,  to  applicants,  if  the  organization  is  not  completed 
in  one  year,  or  after  such  further  period,  not  exceeding  one 
year,  as  may  be  authorized  by  the  Insurance  Commissioner, 
shall  be  filed  with  the  Insurance  Commissioner,  who  may 
require  such  further  information  as  he  deems  necessary, 
and  if  the  purposes  of  the  association  conform  to  the  re- 
quirements of  this  Act,  and  all  provisions  of  the  law  have 
been  complied  with,  the  Insurance  Commissioner  shall  so 
certify  and  retain  and  keep  on  file  and  furnish  the  incor- 
porators a  preliminary  certificate  authorizing  said  associa- 
tion to  solicit  members  as  hereinafter  provided. 

Upon  receipt  of  said  certificate  from  the  Insurance  Com- 
missioner, said  association  may  solicit  members  for  the  pur- 
pose of  completing  its  organization,  and  shall  collect  from 
each  applicant  the  amount  of  not  less  than  one  death  benefit 
assessment  or  payment,  in  accordance  with  its  tables  of 
rates,  as  provided  by  its  constitution  and  laws,  and  shall 
issue  [to]  each  such  applicant  a  receipt  for  the  amount  so 
collected.  But  no  such  association  shall  incur  any  liability 
other  than  for  such  advance  payments,  nor  issue  any  benefit 
certificate,  nor  pay,  or  allow,  or  offer  a'  promise  to  pay  or 
allow  to  any  person  any  death  or  disability  benefit  until 
actual  bona  fide  applications  for  death  benefit  certificates 
have  been  secured  upon  at  least  five  hundred  lives  for  at 
least  one  thousand  dollars  each,  and  all  such  applicants  for 


—93— 

death  benefits  shall  have  been  regularly  examined  by  legally 
qualified  practicing  physicians,  and  certificates  of  such  ex- 
aminations have  been  duly  filed  and  approved  by  the  chief 
medical  examiner  of  such  association,  nor  until  there  shall 
be  established  ten  subordinate  lodges  or  branches  into 
which  said  five  hundred  applicants  have  been  initiated,  nor 
until  there  has  been  submitted  to  the  Insurance  Commis- 
sioner, under  oath  of  the  president  and  secretary  or  cor- 
responding officers  of  such  association,  a  list  of  such  appli- 
cants, giving  their  names,  addresses^  date  examined,  date 
approved,  date  initiated,  name  and  number  of  the  subordi- 
nate branch  of  which  each  applicant  is  a  member,  amount 
of  benefits  to  be  granted,  rate  of  regular  pa}ments  or  as- 
sessments, which  shall  not  be  lower  for  death  benefits  than 
those  required  by  the  National  Fraternal  Congress  table  of 
mortality,  with  interest  at  four  per  cent,  per  annum;  nor 
until  it  shall  be  shown  to  the  Insurance  Commissioner  by  the 
sworn  statement  of  the  treasurer  or  corresponding  officer 
of  such  association  that  at  least  five  hundred  applicants 
have  each  paid  in  cash  at  least  one  regular  monthly  pay- 
ment or  assessment  as  herein  provided  per  one  thousand 
dollars  of  indemnity  to  be  effected,  which  payments  in  the 
aggregate  shall  amount  to  at  least  twenty-five  hundred  dol- 
lars, all  of  which  shall  be  credited  to  the  mortuary  or  dis- 
ability fund  on  account  of  such  applicants,  and  no  part  of 
which  may  be  used  for  expenses. 

Said  advanced  payments  shall,  during  the  period  of  or- 
ganization, be  held  in  trust  for,  and,  if  the  organization  is 
not  completed  within  one  year  as  hereinafter  provided,  re- 
turned to  said  applicants. 

The  Insurance  Commissioner  may  make  such  examina- 
tion and  require  such  further  information  as  he  may  deem 
advisable,  and  upon  presentation  of  satisfactory  evidence 
that  the  association  has  complied  with  all  the  provisions  of 
the  law,  he  shall  issue  to  such  association  a  certificate  to 
that  effect.  Such  certificate  shall  be  prima  facte  evidence  of 
the  existence  of  such  association  at  the  date  of  such  certifi- 
cate.   The  Insurance  Commissioner  shall  cause  a  record  of 


—94— 

such  certificate  to  be  made  and  a  certified  cop)'  of  such 
record  may  be  given  in  evidence  with  like  effect  as  the  origi- 
nal certificate. 

No  preliminary  certificate  granted  under  the  provisions 
of  this  section  shall  be  valid  after  one  year  from  its  date,  or 
after  such  further  period,  not  exceeding  one  year,  as  may 
be  authorized  by  the  Insurance  Commissioner  upon  cause 
shown,  unless  five  hundred  applicants  herein  required  have 
been  secured  and  the  organization  has  been  completed  as 
herein  provided,  and  the  articles  of  association  and  all  pro- 
ceedings thereunder  shall  become  null  and  void  in  one  year 
from  the  date  of  said  preliminary  certificate,  or  at  the  expira- 
tion of  said  extended  period,  unless  such  association  shall 
have  completed  its  organization  and  commenced  business  as 
herein  provided.  When  any  domestic  association  shall  have 
discontinued  business  for  the  period  of  one  year,  its  charter 
shall  become  null  and  void. 

Sec.  14.  Be  it  further  enacted,  That  any  domestic  asso- 
ciation now  engaged  in  transacting  business  in  this  State 
may  exercise,  after  the  passage  of  this  Act,  all  of  the  rights 
conferred  thereby,  and,  in  addition  thereto,  may  exercise 
all  of  the  rights,  powers,  and  privileges  now  exercised  or 
possessed  by  it  under  its  charter  or  articles  of  association 
not  inconsistent  with  this  Act,  or  it  may  be  reincorporated 
hereunder.  But  no  such  association  already  organized  shall 
be  required  to  reincorporate  hereunder,  nor  shall  it  be  re- 
quired to  adopt  the  rates  prescribed  herein  for  new  asso- 
ciations, in  order  to  avail  itself  of  the  privileges  of  this  Act, 
and  any  such  association  may  amend  its  articles  of  associa- 
tion from  time  to  time  in  the  manner  provided  therein,  or 
in  its  constitution  or  laws,  and  all  such  amendments  shall 
be  filed  with  the  Insurance  Commissioner,  and  shall  become 
operative  upon  such  filing  unless  a  later  time  be  provided 
in  such  amendments  or  in  its  articles  of  association,  consti- 
tution, or  laws. 

Sec.  15.  Be  it  further  enacted,  That  no  domestic  asso- 
ciation shall  transfer  its  membership  or  funds  to  any  asso- 
ciation not  authorized  by  the  Insurance  Commissioner  to 


—95— 

transact  business  in  this  State ;  nor  shall  an}-  such  associa- 
tion transfer  its  membership  or  funds  to  any  licensed  asso- 
ciation, unless  the  said  contract  to  transfer  has  been  ap- 
proved by  a  two-thirds  vote  of  the  members  of  the  supreme 
body  of  the  association  whose  membership  is  proposed  to 
be  transferred,  and  by  a  two-thirds  vote  of  the  trustees  or 
board  having  charge  of  the  association  proposing  to  take 
such  membership. 

Sec.  i6.  Be  it  further  enacted,  That  no  fraternal  benefi- 
ciary association  shall  be  authorized  to  do  business  in  this 
State  under  the  provisions  of  this  Act,  whether  incorpo- 
rated under  the  laws  of  this  or  any  other  State,  province  or 
territory,  which  associates  with,  or  seeks  to  associate  with, 
as  members  of  the  same  lodge,  order,  fraternity,  society  or 
association,  the  white  and  colored  races  with  the  objects 
and  purposes  provided  in  this  Act. 

Sec.  17.  Be  it  further  enacted,  That  foreign  associa- 
tions which  are  now  authorized  to  transact  business  in  this 
State  in  accordance  with  this  Act  may  continue  such  busi- 
ness until  the  first  day  of  April  next  succeeding  the  passage 
of  this  Act,  and  the  authority  of  such  associations  may 
thereafter  be  renewed  annually,  but  in  all  cases  to  terminate 
on  the  first  day  of  the  succeeding  April.  For  each  such 
license  or  renewal  the  association  shall  pay  the  Insurance 
Commissioner  $10.  A  duly  certified  copy  of  such  license 
shall  be  prima  facie  evidence  that  the  licensee  is  a  fraternal 
beneficiary  association  within  the  meaning  of  this  Act. 

Sec.  18.  Be  it  further  enacted,  That  no  foreign  asso- 
ciation, which  is  not  now  authorized  to  transact  business  in 
this  State,  shall  transact  any  -business  herein  without  a 
license  from  the  Insurance  Commissioner.  Before  receiv- 
ing such  license,  it  shall  file  with  the  Insurance  Commis- 
sioner a  duly  certified  copy  of  its  charter  or  articles  of  asso- 
ciation; a  copy  of  its  constitution  and  laws,  certified  by  its 
secretary  or  corresponding  officer ;  a  power  of  attorney  to 
the  Insurance  Commissioner  as  hereinafter  provided ;  a  state- 
ment under  oath  of  its  president  and  secretary  or  cor- 
responding officers  in  the  form  required  by  the  Insurance 


-96- 

Commissioner,  duly  verified  by  an  examination  made  by  the 
supervising  insurance  ofificial  of  its  home  State,  of  the  busi- 
ness for  the  preceding-  year;  a  copy  of  its  contract,  which 
must  show  that  benefits  are  provided  for  by  assessments 
upon  or  other  payments  by  persons  holding  similar  con- 
tracts, and  shall  furnish  the  Insurance  Commissioner  with 
Siich  other  information  as  he  may  deem  necessary  to  a 
proper  exhibit  of  its  business  and  plan  of  working,  and  if 
he  finds  that  it  is  transacting  business  in  accordance  with 
the  provisions  of  this  Act,  that  its  assets  are  invested  in 
accordance  with  the  laws  of  the  State  where  it  is  organized, 
and  that  it  has  the  membership  and  qualifications  required 
of  domestic  associations  organized  under  this  Act,  he  may 
license  such  association  to  do  business  in  this  State  until 
the  first  day  of  the  succeeding  April,  and  such  license  may 
be  renewed  annually,  but  in  all  cases  to  terminate  on  the 
first  day  of  the  succeeding  April. 

Sec.  19.  Be  it  further  enacted,  That  no  license  shall  be 
issued  to  any  association  not  now  transacting  business  in 
this  State  which  collects  from  any  of  its  members  assess- 
ments or  payments  for  death  benefits  lower  than  those  re- 
quired by  the  Fraternal  Congress  Mortality  Table  of  1900, 
with  interest  at  four  per  cent,  per  annum ;  Proznded,  That 
this  section  shall  not  apply  to  fraternal  beneficiary  associa- 
tions organized  prior  to  Janaury  i,  1885. 

Sec.  20.  Be  it  further  enacted,  That  when  the  Insur- 
ance Commissioner  refuses  to  license  any  association,  or 
revokes  its  authority  to  do  business  in  this  State,  he  shall 
reduce  his  ruling,  order  or  decision  to  writing  and  file  the 
same  in  his  ofifice,  and  shall  furnish  a  copy  thereof,  together 
with  a  statement  of  his  reasons,  to  the  officers  of  the  asso- 
ciation, upon  request.  Any  society  afifected  by  any  such 
ruling,  order,  or  decision  shall  have  the  right  to  appeal  to 
any  court  of  competent  jurisdiction  in  this  State  by  filing 
with  said  Commissioner  a  notice  of  such  appeal,  in  writing, 
stating  specifically  to  which  court  such  appeal  is  proposed 
to  be  taken,  and  in  such  case  said  Commissioner  shall  forth- 
with, and  within  ten  days  thereafter,  deliver  to  such  asso- 


—97— 

elation  a  full  and  certified  transeript  of  all  proceedings  had 
before  him  in  such  matter,  including  all  applications,  to- 
gether with  all  orders,  rulings,  and  decisions  had  thereon, 
and  on  such  transcript  being  filed  in  said  court,  such  court 
shall  be  fully  possessed  of  said  action,  and  a  full  trial  on 
the  merits  de  nova  shall  be  had  thereon ;  Provided,  That 
such  appeal  shall  be  filed  in  such  court  within  forty  days 
after  the  rendition  of  the  ruling,  order,  or  decision  appealed 
from  ;  And  [provided,  further,  that  nothing  contained  in  this 
or  the  preceding  section  shall  be  taken  or  construed  as  pre- 
venting any  such  association  from  continuing  in  good  faith 
all  contracts  made  in  this  State  during  the  time  such  asso- 
ciation was  legally  authorized  to  transact  business  herein. 

Sec.  21.  Be  it  further  enaetcd,  That  every  foreign  asso- 
ciation now  transacting  business  in  this  State  shall,  within 
thirty  days  after  the  passage  of  this  Act,  and  every  such 
association  hereafter  applying  for  admission,  shall,  before 
being  licensed,  appoint  in  writing  the  Insurance  Commis- 
sioner and  his  successors  in  office  to  be  its  true  and  lawful 
attorney,  upon  whom  all  legal  process  in  any  action  or  pro- 
ceeding against  it  shall  be  served,  and  in  such  writing  shall 
agree  that  any  lawful  process  against  it,  which  is  served 
upon  said  attorney,  shall  be  of  the  same  legal  force  and 
validity  as  if  served  upon  the  association,  and  that  the  au- 
thority shall  continue  in  force  so  long  as  any  liability  re- 
mains outstanding  in  this  State. 

Copies  of  such  appointment,  certified  by  the  Insurance 
Commissioner,  shall  be  deemed  sufficient  evidence  thereof, 
and  shall  be  admitted  in  evidence  with  the  same  force  and 
efifect  as  the  original  thereof  might  be  admitted.  Service 
may  only  be  had  upon  such  attorney,  must  be  made  in 
duplicate,  and  shall  be  deemed  sufficient  service  upon  such 
association ;  provided,  however,  that  no  such  service  shall 
be  valid  or  binding  against  any  such  association  when  it  is 
required  thereunder  to  file  its  answer,  pleading,  or  defense 
in  less  than  thirty  days  after  the  date  of  such  service.  When 
legal  process  against  any  association  is  served  upon  said 
Insurance    Commissioner,    he    shall    forward    forthwith    by 

7 


-98- 

registered  mail  one  of  the  duplicate  copies,  prepaid  and 
directed  to  its  secretary  or  corresponding  officer.  The 
plaintiff  in  such  process  so  served  shall  pay  to  the  Insurance 
Commissioner  for  the  use  of  the  State  at  the  time  of  such 
service  a  fee  of  $2,  which  shall  be  recovered  by  him  as  part 
of  the  taxable  costs,  if  he  prevails  in  the  suit. 

Sec.  22.  Be  it  further  enacted,  That  any  domestic  asso- 
ciation may  provide  that  the  meetings  of  its  legislative  or 
governing  body  may  be  held  in  any  State,  district,  province, 
or  territory  wherein  such  association  has  subordinate 
branches,  and  all  business  transacted  at  such  meetings  shall 
be  as  valid  in  all  respects  as  if  such  meetings  were  held  in 
this  State.  But  its  principal  office  shall  be  located  in  this 
State. 

Sec.  23.  Be  it  further  enacted,  That  officers  and  mem- 
bers of  the  supreme,  or  grand,  or  any  subordinate  body  of 
any  such  incorporate  association  shall  not  be  individually 
liable  for  the  payment  of  any  disability  or  death  benefits 
provided  for  in  the  laws  and  contracts  of  such  association, 
but  the  same  shall  be  payable  only  out  of  the  funds  of  such 
association  and  in  the  manner  provided  by  its  laws. 

Sec.  24.  Be  it  further  enacted.  That  the  constitution 
and  laws  of  the  association  may  provide  that  no  subordinate 
body,  nor  any  of  its  officers  or  members,  shall  have  the 
power  or  authority  to  waive  any  of  the  provisions  of  the 
laws  and  constitution  of  the  association,  and  the  same  shall 
be  binding  on  the  association  and  each  and  every  member 
thereof. 

Sec.  25.  Be  it  further  enacted,  That  all  grand  lodges, 
by  whatever  name  known,  whether  incorporated  or  not, 
holding  charters  from  a  supreme  governing  body,  which  are 
conducting  business  in  this  State,  upon  the  passage  of  this 
Act,  as  a  fraternal  beneficiary  association,  upon  what  is 
known  as  the  separate  jurisdiction  plan,  shall  be  treated  as 
a  federation  of  grand  lodges  and  not  as  simple  State  or- 
ganizations, and  all  reports  required  by  the  provisions  of 
this  Act  shall  be  made  and  furnished  by  the  officers  of  each 


supreme  g-overning  body  and  shall  embrace  and  contain  the 
transactions,  liabilities,  and  assets  of  the  entire  order. 

Sec.  26.  Be  it  further  enacted.  That  every  association 
transacting-  business  under  this  Act  shall  file  with  the  In- 
surance Commissioner  a  duly  certified  copy  of  all  amend- 
ments of,  or  additions  to,  its  constitution  and  laws  within 
ninety  days  after  the  enactment  of  the  same.  Printed  copies 
of  the  constitution  and  laws  and  of  additions  or  amend- 
ments thereto,  certified  by  the  secretary  or  corresponding 
officer  of  the  association,  shall  be  prima  facie  evidence  of 
the  legal  adoption  thereof. 

Sec.  27.  Be  it  further  enacted,  That  every  association 
transacting  business  in  this  State  shall  annually,  on  or  be- 
fore the  first  day  of  March,  file  with  the  Insurance  Commis- 
sioner, in  such  form  as  he  may  require,  a  statement  under 
oath  of  its  president  and  secretar}^  or  corresponding  officer, 
of  its  condition  and  standing  on  the  thirty-first  day  of  De- 
cember next  preceding,  and  of  its  transactions  for  the  year 
ending  on  that  date,  and  shall,  also, 'furnish  such  other  in- 
formation as  the  Insurance  Commissioner  may  deem  neces- 
sary to  a  proper  exhibit  of  its  business  and  plan  of  working. 
The  Insurance  Commissioner  may  at  other  times  require 
any  further  statement  he  may  deem  necessary  to  be  made 
relating  to  such  associations.  But  such  association  [Insur- 
ance Commissioner]  shall  neither  make,  nor  permit  to  be 
made,  from  any  information  so  obtained,  any  valuation  of 
its  outstanding  benefit  certificates  unless  requested  to  make 
such  valuation  by  the  association. 

Sec.  28.  Be  it  further  enacted.  That  the  Insurance  Com- 
missioner, or  any  person  he  may  appoint,  shall  have  the 
power  of  visitation  and  examination  into  the  affairs  of  any 
domestic  association.  He  may  employ  assistants  for  the 
purpose  of  such  examination,  and  he,  or  any  person  he  may 
appoint,  shall  have  free  access  to  any  books,  papers,  and 
documents  that  relate  to  the  business  of  the  association,  and 
may  summon  and  qualify  as  witnesses,  under  oath,  and  ex- 
amine its  officers,  agents,  and  employes,  or  other  persons  in 
relation  to  the  affairs,  transactions,   and  condition  of  the 


—  lOO — 

association.  The  expense  of  such  examination  shall  be 
paid  by  the  association  examined,  but  the  amount  thereof 
shall  not  exceed  one  hundred  dollars. 

Whenever,  after  examination,  the  Insurance  Commis- 
sioner is  satisfied  that  any  domestic  association  has  failed 
to  comply  with  any  provisions  of  this  law  or  is  exceeding 
its  powers ;  or  is  not  carrying  out  its  contracts  in  good 
faith ;  or  is  transacting  business  fraudulently ;  or  is  in  such 
condition  as  to  render  further  proceedings  hazardous  to 
the  public  or  its  certificate  holders ;  or  whenever  any  do- 
mestic association,  after  the  existence  of  one  year  or  more, 
shall  have  a  membership  of  less  than  three  hundred,  or 
votes  to  discontinue  business,  the  Insurance  Commissioner 
may  present  the  facts  relative  thereto  to  the  State  Attorney- 
General,  who  shall,  if  he  deem  the  circumstances  warrant, 
commence  an  action  in  quo  warranto  in  a  court  of  compe- 
tent jurisdiction,  and  such  court  shall  thereupon  notify  the 
officers  of  such  association  of  a  hearing,  and,  unless  it  shall 
then  appear  that  some. special  and  good  reason  exists  why 
such  association  should  not  be  closed,  said  association  shall 
be  enjoined  from  carrying  on  any  further  business,  and 
some  person  shall  be  appointed  receiver  of  such  association, 
and  shall  proceed  at  once  to  take  possession  of  the  books, 
papers,  moneys,  and  other  assets  of  the  association,  and 
shall  forthwith,  under  the  direction  of  the  court,  proceed  to 
close  the  affairs  of  the  association,  and  to  distribute  its  funds 
to  those  entitled  thereto.  No  such  proceeding  shall  be  com- 
menced b}'-  the  State  Attorney-General  against  any  such 
association  until  after  notice  has  been  duly  served  on  the 
chief  executive  officers  of  the  assocfation  and  a  reasonable 
opportunity  given  to  it,  on  a  date  to  be  named  in  said 
notice,  to  show  cause  why  such  proceedings  should  not  be 
commenced. 

Sec.  29.  Be  it  further  enacted,  That  no  action  or  pro- 
ceeding to  discontinue  or  enjoin,  in  whole  or  in  part,  the 
business  or  methods  of  any  such  domestic  association,  or 
to  appoint  a  receiver  therefor,  or  to  dissolve  the  same,  or  in 
any  manner  affecting  its  corporate  rights,  or  to  oust  an}' 


■lOI- 


foreign  association,  or  enjoin  it  from  transacting;-  business 
in  this  State,  shall  be  entertained  by  any  court,  except  on 
the  suit  of  the  Attorney-General  of  this  State. 

Sec.  30.  Be  it  further  enacted,  That  the  Insurance  Com- 
missioner, or  any  person  whom  he  may  appoint,  may  ex- 
amine any  foreign  association  transacting  or  applying  for 
admission  to  transact  business  in  this  State.  The  Insurance 
Commissioner  may  employ  assistants  for  the  purpose  of 
such  examination,  and  he,  or  any  person  he  may  appoint, 
shall  have  free  access  to  all  the  books,  papers,  and  docu- 
ments that  relate  to  the  business  of  the  association,  and 
may  summon  and  qualify  as  witnesses  under  oath  and  ex- 
amine its  officers,  agents,  employes,  and  other  persons  in 
relation  to  the  affairs,  transactions,  and  conditions  of  the 
association.  He  may,  in  his  discretion,  accept  in  lieu  of 
such  examination  [the  examination]  of  the  insurance  de- 
partment of  the  State,  territory,  district,  province,  or  coun- 
try where  such  association  is  organized.  All  examinations 
made  under  the  provisions  of  this  section  shall  be  made  at 
the  expense  of  the  association  examined,  but  the  expenses 
of  any  examination  shall  not  exceed  two  hundred  dollars. 

If  any  such  association  or  its  officers  refuse  to  submit  to 
such  examination,  or  to  comply  with  the  provisions  of  this 
section  relating  thereto,  the  authority  of  such  association  to 
transact  business  in  this  State  shall  be  revoked  until  satis- 
factory evidence  is  furnished  the  Insurance  Commissioner 
relating  to  the  condition  and  affairs  of  the  association,  and 
during  such  revocation  the  association  shall  not  transact  any 
business  in  this  State. 

Sec.  31.  Be  it  further  enacted,  That  when  the  Insur- 
ance Commissioner,  on  investigation,  is  satisfied  that  any 
foreign  association  transacting  business  under  this  Act  has 
exceeded  its  powers,  or  has  failed  to  comply  with  the  pro- 
visions of  the  law,  or  is  conducting  business  fraudulently, 
or  is  not  carrying  out  its  contracts  in  good  faith,  or  is  in 
such  condition  as  to  render  further  proceedings  hazardous 
to  the  public  or  its  certificate  holders,  he  may  revoke  the 
certificate  of  authoritv  granted  to  it,  and  shall  cause  notifi- 


-I02- 


cation  thereof  to  be  published  in  one  or  more  newspapers 
of  general  circulation,  and  no  new  business  shall  thereafter 
be  done  by  it  or  its  agents  in  this  State,  while  such  default 
or  disability  continues,  nor  until  its  authority  to  do  busi- 
ness is  restored  by  the  Insurance  Commissioner;  provided, 
that  nothing  in  this  Act  shall  prevent  such  association  from 
applying  to  a  court  of  competent  jurisdiction,  by  mandamus 
or  otherwise,  to  compel  said  Insurance  Commissioner  to 
issue  such  certificate,  if  such  court,  in  its  discretion,  should 
determine  that  said  association  was  entitled,  under  the  law, 
to  have  said  certificate  issued  to  it. 

Sec.  2i~-  Be  it  further  enacted,  That  nothing  contained 
in  this  act  shall  be  construed  to  affect  or  apply  to  grand  or 
subordinate  lodges  of  Masons,  Odd  Fellows,  or  Knights  of 
Pythias  (exclusive  of  the  insurance  branch  of  the  Supreme 
Lodge  Knights  of  Pythias),  or  to  similar  orders  which  do 
not  issue  insurance  certificates,  nor  to  local  lodges  of  an 
association  now  doing  business  in  this  State,  that  provide 
death  benefits  not  exceeding  three  hundred  dollars  to  any 
one  person,  or  disability  benefits  not  exceeding  three  hun- 
dred dollars  in  any  one  year  to  any  one  person,  or  both, 
nor  to  domestic  associations  which  limit  their  membership 
to  the  employes  of  a  particular  city  or  town,  designated 
firm,  business  house,  or  corporation ;  the  Insurance  Com- 
missioner may  require  from  any  association  such  informa- 
tion as  will  enable  him  to  determine  whether  such  associa- 
tion is  exempt  from  the  provisions  of  this  Act.  No  asso- 
ciation which  is  exempt  by  the  provisions  of  this  section 
from  the  requirements  of  this  Act  shall  give  or  allow,  or 
promise  to  give  or  allow,  to  any  person  an}'  compensation 
for  procuring  new  members. 

Sec.  33.  Be  it  further  enacted,  That  associations  com- 
ing within  the  definition  of  fraternal  beneficiary  associations 
as  defined  by  this  Act,  and  now  transacting  business  as  fra- 
ternal beneficiary  associations,  organized  prior  to  Anno 
Domini  1900,  and  authorized  to  do  business  in  this  State 
prior  to  and  at  the  time  of  the  passage  of  this  Act,  and 
which   shall   have   established,   or  may   hereafter   establish, 


— 103— 

rates  deemed  by  it  adequate  to  perpetuate  its  existence  or 
meet  its  obligations,  and  in  so  doing-  has  increased,  or  shall 
increase,  the  payments  required  to  be  made  by  any  mem- 
ber, so  that  such  member  shall  be  unable  for  any  reason  to 
make  such  payment  and  continue  his  membership ;  in  such 
case  or  cases,  any  such  association  may  make  such  allow- 
ance to  such  member  or  members,  by  way  of  extended  in- 
surance or  reduced  benefit  payable  to  a  beneficiary  desig- 
nated in  accordance  with  the  provisions  of  Section  6  of  this 
Act.  as  it  may  determine  to  be  equitable  and  provided  for 
by  the  laws  and  regulations,  and  may  provide  for  paying 
the  cost  of  carrying  such  extended  insurance  out  of  any 
reserve,  emergency,  surplus,  or  other  fund  it  has  or  shall 
accumulate  or  create. 

The  provisions  of  this  section  shall  not  be  construed  as 
applicable  to  any  association  which  does  not  make  pro- 
vision for  such  extended  insurance  in  its  laws  or  regula- 
tions, nor  shall  the  members  of  any  association  which  does 
not,  by  its  laws  or  regulations,  make  provisions  for  such 
extended  insurance,  have  any  right  to  or  interest  in  any 
fund  which  any  such  association  may  have  now  or  may 
hereafter  create,  either  as  a  reserve,  emergency,  surplus,  or 
other  fund. 

Sfx.  34.  Be  it  further  enaetcd.  That  such  associations 
shall  not  employ  paid  agents  in  soliciting  or  procuring  mem- 
bers, except  in  the  organization  or  building  up  of  subordi- 
nate bodies,  or  granting  members  inducements  to  procure 
new  members. 

Sec.  35.  Be  it  further  enacted,  That  each  and  every  cer- 
tificate issued  by  any  association  operating  under  the  pro- 
visions of  this  Act  shall  be  incontestible  on  account  of 
erroneous  or  innocent  statements  made  in  the  application 
as  to  age,  provided  the  member  w^as  within  the  age  limited 
for  membership  at  the  time  of  the  application ;  and 
provided,  further,  that  in  the  settlement  of  any  loss,  where 
there  was  an  error  as  to  age,  such  settlement  shall  be  made 
on  the  basis  of  the  correct  age.  But  no  association  operat- 
ing under  the  provisions  of  this  Act  shall  contest  the  age 


— 104 — 

of  any  member,  after  his  death,  unless  the  proof  offered  by 
the  beneficiary  shows  the  age  of  the  deceased  member  to 
be  different  from  that  given  in  his  appHcation;  then  the 
correct  age  may  be  ascertained,  and  settlement  made  as 
herein  provided. 

Sec.  36.  Be  it  further  enacted,  That  any  person,  officer, 
member,  or  examining  physician,  who  shall  knowingly  or 
wilfully  make  any  false  or  fraudulent  statement  or  repre- 
sentation in  or  with  reference  to  any  application  for  mem- 
bership, or  for  the  purpose  of  obtaining  money  from  or 
benefit  in  any  association  transacting  business  under  this 
Act,  shall  be  guilty  of  a  misdemeanor,  and,  upon  conviction 
thereof,  shall  be  punished  by  a  fine  of  not  less  than  one 
hundred  dollars,  nor  more  than  five  hundred  dollars,  or  im- 
prisonment in  the  county  jail  for  not  less  than  thirty  days, 
nor  more  than  one  year,  or  Both,  in  the  discretion  of  the 
court,  and  any  person  who  shall  wilfully  make  a  false  state- 
ment of  any  material  fact  or  thing  in  a  sworn  statement  as 
to  the  death  or  disability  of  a  certificate  holder  in  any  such 
association  for  the  purpose  of  procuring  payment  of  a 
benefit  named  in  the  certificate  of  such  holder,  and  any 
person  who  shall  wilfully  make  any  false  statement  in  any 
verified  report  or  declaration  under  oath  required  or  au- 
thorized by  this  Act,  shall  be  guilty  of  perjury,  and  shall  be 
proceeded  against  and  punished  as  provided  by  the  statutes 
of  this  State  in  relation  to  the  crime  of  perjury. 

Any  person  who  shall  solicit  membership  for,  or  in  any 
manner  assist  in  procuring  membership  in,  any  association 
not  licensed  to  do  business  in  this  State,  or  who  shall  solicit 
membership  for,  or  in  any  manner  assist  in  procuring  mem- 
bership in,  any  such  association  not  authorized  as  herein 
provided  to  do  business  as  herein  defined  in  this  State,  shall 
be  guilty  of  a  misdemeanor,  and,  upon  conviction  thereof, 
shall  be  punished  by  a  fine  of  not  less  than  fifty  nor  more 
than  two  hundred  dollars. 

Any  association,  or  any  officer,  agent,  or  employe  thereof, 
neglecting  or  refusing  to  comply  with,  or  violating  any 
of  the  provisions  of  this  Act,  the  penalty  for  which  neglect, 


—105— 

refusal,  or  violation  is  not  specified  in  this  section,  shall  be 
fined  not  exceeding  two  hundred  dollars  upon  conviction 
thereof. 

Sec.  37.  Be  it  further  enacted,  That  the  word  "associa- 
tion," as  used  in  this  Act,  shall  be  taken  and  construed  as 
meaning  a  fraternal  beneficiary  corporation,  society,  order, 
or  voluntary  association  as  defined  in  this  Act.  The  words 
"domestic  association"  shall  be  taken  and  construed  as 
meaning  an  association  organized  or  incorporated  under 
the  laws  of  this  State.  The  words  "foreign  association" 
shall  be  taken  and  construed  as  meaning  an  association  or- 
ganized or  incorporated  under  the  laws  of  another  State, 
territory,  district,  province,  or  country.  The  word  "State," 
as  used  in  this  Act,  shall  be  taken  and  construed  as  meaning 
"State,"  "Territory,"  "District."  "County"  [country],  or 
"Province."  All  provisions  of  each  section  of  this  Act,  ex- 
cept as  otherwise  provided,  shall  be  taken  and  construed  as 
applying  to  both  domestic  and  foreign  associations. 

In  the  event  of  a  vacancy  in  the  office  of  the  Insurance 
Commissioner,  or  in  the  absence  or  disability  of  that  officer, 
the  Deputy  Insurance  Commissioner  shall  perform  all  the 
duties  required  of  the  Insurance  Commissioner  by  this  Act. 

Sec.  38.  Be  it  further  enacted,  That  nothing  contained 
in  this  Act  shall  be  construed  to  require  any  society  to  make 
or  cause  to  be  made  any  valuation  of  its  benefit  certificates 
for  any  purpose  whatever,  nor  shall  the  Insurance  Depart- 
ment have  the  right  to  require  or  demand  that  such  valua- 
tion be  made  or  embraced  in  the  report  of  any  fraternal 
beneficiary  society  to  the  Insurance  Department. 

Sec.  39.  Be  it  further  enacted,  That  Chapter  113,  Acts 
of  1901,  passed  March  22,  1901,  and  approved  April  13, 
1901,  and  all  other  laws  and  parts  of  laws  in  conflict  with 
the  provisions  of  this  Act,  be,  and  the  same  are  hereby,  re- 
pealed. 

Sec.  40.  Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 

Passed  April  14,  1905. 

Approved  April  17,  1905. 


— io6 — 


FRATERNAL  CONGRESS  MORTALITY  TABLE 


OF 

1900. 

(Referred  to 

in  Section  19.) 

PROBABIL- 

NUMBER 

NUMBER 

ITY  OF 

AGE 

LIVING 

DYING 

DYING 

20 

100,000 

500 

.005000 

21 

99,500 

501 

.005035 

22 

98,999 

502 

.005071 

23 

98,497 

503 

.005107 

24 

97,994 

505 

.005153 

25 

97,489  . 

507 

.005201 

26 

96,982 

510 

.005259 

27 

96,472 

513 

.005318 

28 

95,959 

517 

.005388 

29 

95,442 

522 

.005469 

30 

94,920 

527 

.005552 

31 

94,393 

533 

.005647 

32 

93,860 

540 

•005753 

33 

93.320 

548 

.005872 

34 

9^,77^ 

557 

.006004 

35 

92.215 

567 

.006149 

36 

91,648 

578 

.006307 

37 

91,070 

591 

.006490 

38 

90,479 

606 

.006698 

39 

89,873 

622 

.006921 

40 

89,251 

640 

.007171 

41 

88.611 

660 

.007448 

42 

87,951 

682 

.007766 

43 

87,268 

708 

.008113 

44 

86,560 

734 

.008480 

45 

85.826 

761 

.008867 

46 

85,065 

790 

.009287 

47 

84.275 

822 

.009754 

48 

83453 

857 

.0102693 

49 

82,596 

894 

.0108238 

50 

81,702 

935 

.0114440 

51 

80.767 

980 

.0121337 

52 

79,786 

1029 

.0128970 

■I07 — 


NUMBER 

NUMBER 

PROBABIL- 
ITY  OF 

AGE 

LIVING 

DYING 

DYING 

53 

78,757 

1083 

.0137511 

54 

77,674 

I  140 

.0146767 

55 

76,534 

1202 

•0157054 

56 

7S,2>Z2 

1270 

.0168587 

57 

74,062 

1342 

.0181200 

58 

72,720 

I418 

.0194994 

59 

71,302 

I5OI 

.0210513 

60 

69,801 

1588 

•0227504 

61 

68,213 

I68I 

.0246434 

62 

66,532 

1778 

.0267240 

63 

64,754 

1880 

.0290330 

64 

62,874 

1985 

•O3I57II 

65 

60,889 

2094 

•0343904 

66 

58.795 

2206 

.0375206 

67 

56,589 

2318 

.0409620 

68 

54,271 

2430 

•0447753 

69 

51.841 

2539 

.0489767 

70 

49,302 

2645 

.0536489 

71 

46,657 

2744 

.0588122 

72 

43,913 

2832 

.0644912 

73 

41,081 

2909 

.0708113 

74 

38,172 

2969 

•0777795 

75 

35,203 

3009 

•0854757 

76 

32,194 

3026 

•0939927 

77 

29,168 

3016 

.1034010 

78 

26,152 

2977 

•I  138345 

79 

23,175 

2905 

•1253506 

80 

20,270 

2799 

•I385163 

81 

17.471 

2659 

•1521951 

82 

14,812 

2485 

.1677694 

83 

12,327 

2280 

.1849599 

84 

10,047 

2050 

.1855707 

85 

7,997 

1800 

.2250844 

86 

6,197 

1539 

.2483460 

87 

4,658 

1277 

.2741520 

88 

3.381 

1023 

.3025732 

89 

2,358 

788 

,3341815 

— io8— 


PROBABIL- 

NUMBER 

NUMBER 

ITY  OF 

AGE 

LIVING 

DYING 

DYING 

90 

1,570 

579 

.3687898 

91 

991 

404 

.4076690 

92 

587 

264 

•4497445 

93 

323 

161 

.4984520 

94 

162 

89 

•5493827 

95 

73 

44 

.6027397 

96 

29 

19 

•6551724 

97 

10 

7 

.7000000 

98 

3 

3 

1 .0000000 

PREMIUMS  OR  RATES 


Per  $1,000  of  insurance  computed  in  accordance  with  the 
foregoing  table  at  4  per  cent,  interest : 


POST-MORTEM                CONTINUOUS   LEVEL 

ADVANCE    NAT- 

NATURAL                               ANNUAL   PRE- 

AGE 

URAL  PREMIUMS 

PREMIUMS                                         MIUMS 

21 

$4  84 

$5 

04                 $ 

[O  62 

22 

4 

88 

5  07                   ] 

0  92 

23 

4  91 

5 

II                    ] 

[I  24 

24 

4 

96 

5 

15                   1 

I  57 

25 

5 

00 

5 

20                    ] 

I  91 

26 

5 

06 

5 

26                    ] 

2  28 

27 

5 

II 

5 

32                    ] 

[2    67 

28 

5 

18 

5 

39 

[3   07 

29 

5 

26 

5 

47                    ] 

[3    50 

30 

5 

34 

5 

55                   1 

[3    96 

31 

5 

43 

5 

65                   1 

f4  43 

32 

5 

53 

5 

75                   1 

[4  93 

33 

5 

65 

5 

87                   ] 

[5  46 

34 

5 

77 

6 

00                   ] 

[6  02 

35 

5 

91 

6 

15                   ^ 

[6  62 

36 

6  06 

6 

31                   1 

[7  24 

37 

6 

24 

6 

49 

[7  90 

38 

6 

44 

6 

70 

^8  59 

39 

6 

65 

6 

92                    ] 

[9  33 

— 109 — 


POST-MORTEM 

CONTINUOUS   LEVEL 

ADVANCB    NAT- 

NATURAL 

ANNUAL    PRE- 

AGB 

URAL  PREMIUMS 

PREMIUMS 

MIUMS 

40 

6  89 

7  17 

20      II 

41 

7  16 

7  45 

20  93 

42 

7  46 

7  75 

21    80 

43 

7  80 

8  II 

22    72 

44 

8  15 

8  48 

23   69 

45 

853 

8  87 

24   72 

46 

8  93 

9  29 

25    81 

47 

9  38 

9  75 

26   97 

48 

9  87 

10  27 

28   20 

49 

10  41 

10  82 

29    51 

50 

II  00 

II  44 

30   90 

51 

II  67 

12  13 

32  39 

52 

12  40 

12  90 

33  97 

53 

13  22 

13  75 

35  65 

54 

14  II 

14  68 

37  45 

55 

15  10 

15  71 

39  36 

56 

16  21 

16  86 

41  41 

57 

17  42 

18  12 

43  60 

58 

18  75 

19  50 

45  94 

59 

20  24 

21  05 

48  44 

60 

21  88 

22  75 

51   13 

-II 


OFFICIAL  SURETY  BONDS. 


CHAPTER  175,  ACTS  OF  1895. 

AN  ACT  relative  to  recognizances,  stipulations,  bonds,  and  under- 
takings, and  to  allow  certain  corporations  to  be  accepted  as  surety 
thereon. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  whenever  any  recognizance, 
stipulation,  bond  or  undertaking,  conditioned  for  the  faith- 
ful performance  of  any  duty,  or  for  doing  or  refraining 
from  doing  anything  in  such  recognizance,  stipulation,  bond 
or  undertaking  specified,  is  by  the  laws  of  this  State  re- 
quired or  permitted  to  be  given  with  one  surety  or  with  two 
or  more  sureties,  for  the  execution  of  the  same  or  the  guar- 
anteeing of  the  performance  of  the  condition  thereof  shall 
be  sufficient  when  executed  or  guaranteed  solely  by  a  cor- 
poration incorporated  under  the  laws  of  the  United  States, 
of  this  State,  or  any  other  State,  having  power  to  guarantee 
the  fidelity  of  persons  holding  positions  of  public  or  private 
trust,  and  to  execute  and  guarantee  bonds  and  undertakings 
in  judicial  proceedings ;  Provided,  That  such  recognizance, 
stipulation,  bond  or  undertaking  to  be  approved  by  the  head 
of  department,  court,  judge,  officer,  board  or  body  execu- 
tive, legislative,  or  judicial,  required  to  approve  or  accept 
the  same.  But  no  officer  or  person  having  the  approval  of 
any  bond  shall  exact  that  it  shall  be  furnished  by  a  guaran- 
tee company  or  by  any  particular  guarantee  company. 

Sec.  2.  Be  it  further  enacted,  That  no  such  company, 
organized  under  the  laws  of  any  sovereignty  other  than 
that  of  this  State,  shall  do  business  under  the  provisions 
of  this  Act  within  any  county  of  this  State  until  it  shall, 
by  a  written  power  of  attorney,  appoint  the  Clerk  of  any 
County  Court  of  the  county  within  which  it  intends  to  do 
business  as  its  agent,  upon  whom  may  be  served  all  lawful 
process  against  such  company,  and  who  shall  be  authorized 


— Ill — 

to  enter  an  appearance  in  its  behalf.  Such  power  of  attor- 
ney, duly  certified  and  authenticated,  shall  be  filed  with 
the  Clerk  of  the  County  Court  of  such  county,  which  power 
of  attorney,  or  a  certified  copy  thereof,  shall  be  le^al  evi- 
dence in  all  controversies  arising  under  this  Act.  The  ofiicer 
executing  such  process  upon  such  Clerk  shall  immediately 
transmit  [a  copy]  thereof  by  mail  to  the  company,  and  state 
such  fact  on  his  return ;  Prov-idcd,  That  the  officer  shall  re- 
ceive as  compensation  for  the  transmission  of  a  copy  of 
such  process  the  sum  of  one  ($i)  dollar,  to  be  paid  him  by 
the  plaintiff  in  the  suit,  before  such  copy  shall  be  trans- 
mitted, and  said  sum  shall  be  taxed  in  the  bill  of  costs.  A 
judgment,  decree,  or  order  of  court  entered  or  made  after 
service  of  process  as  aforesaid,  shall  be  as  valid  and  bind- 
ing on  such  company  as  if  secured  with  process  in  said 
county. 

Sec.  3.  Be  it  further  cnaetcd.  That  every  company, 
before  transacting  any  business  under  this  Act,  shall  deposit 
with  the  State  Treasurer  of  this  State  a  copy  of  its  charter, 
or  articles  of  incorporation,  and  a  statement  signed  and 
sworn  to  by  its  president  and  secretary  showing  its  assets 
and  liabilities. 

If  the  said  State  Treasurer  shall  be  satisfied  that  such 
company  has  authority  under  its  charter  to  do  the  business 
provided  for  in  this  Act,  and  that  it  has  a  paid-up  capital 
of  not  less  than  $100,000  in  cash,  or  its  equivalent,  and 
is  able  to  keep  and  perform  its  contracts,  he  shall  grant 
authority,  in  writing,  to  such  company  to  do  business  under 
this  Act ;  and  before  any  company  shall  do  any  business 
under  the  provisions  of  this  Act,  within  any  county  of  this 
State,  it  shall  deposit  with  the  County  Court  Clerk  of  such 
county  a  copy  of  said  grant  of  authority,  properly  certified 
by  the  State  Treasurer,  which  shall  be  filed  in  said  Clerk's 
office. 

Sec.  4.  Be  it  further  enacted,  That  every  such  comj^any 
shall,  in  the  months  of  January,  April,  July  and  October 
of  each  year,  file  with  said  State  Treasurer  a  statement, 
signed  and  sworn  to  by  the  President  and  Secretary,  show- 


— 112 — 

ing  its  assets  and  liabilities,  as  is  required  by  Section  3  of 
this  Act ;  and  the  said  State  Treasurer  shall  have  the  power, 
and  it  shall  be  his  duty,  to  revoke  the  authority  of  any  such 
company  to  transact  any  new  business  under  this  Act  when- 
ever, in  his  judgment,  such  company  is  not  solvent,  or  is 
conducting  its  business  in  violation  of  this  Act. 

He  may  institute  inquiry  at  any  time  into  the  solvency 
of  said  company,  and  whenever  he  shall  become  satisfied  that 
the  authority  of  any  such  company  to  do  business  under  this 
Act  should  be  revoked,  and  he  shall  have,  in  fact,  revoked 
said  authority,  he  shall  forthwith  transmit,  by  mail,  to  the 
County  Court  Clerk  of  each  county  in  this  State,  a  properly 
certified  copy  of  his  act  of  revocation,  and  shall,  moreover, 
cause  to  be  published  in  a  daily  newspaper,  issued  in  the 
cities  of  Knoxville,  Chattanooga,  Nashville  and  Memphis, 
a  copy  of  said  order  of  revocation. 

Sec.  5.  Be  it  further  enacted,  That  any  surety  company 
doing  business  under  the  provisions  of  this  Act  may  be 
sued  in  respect  thereof  in  any  court  in  this  State  which 
has  now  or  may  hereafter  have  jurisdiction  of  actions  or 
suits  upon  such  recognizance,  stipulation,  bond,  or  under- 
taking in  the  county  in  which  such  recognizance,  stipula- 
tion, bond  or  undertaking  was  made  or  guaranteed,  or  in 
the  county  in  which  the  principal  office  of  such  company  is 
located ;  and  for  the  purposes  of  this  Act  such  recognizance, 
stipulation,  bond  or  undertaking  shall  be  treated  as  made 
or  guaranteed  in  the  county  in  which  the  office  is  located, 
to  which  it  is  returnable,  or  in  which  it  is  filed,  or  in  the 
county  in  which  the  principal  in  such  recognizance,  stipula- 
tion, bond  or  undertaking,  resided  when  it  was  made  or 
guaranteed. 

Sec.  6.  Be  it  further  enacted,  That  if  any  such  com- 
pany shall  neglect  or  refuse  to  pay  any  final  judgment  or 
decree  rendered  against  it  upon  any  such  recognizance, 
stipulation,  bond  or  undertaking  made  or  guaranteed  by  it 
under  the  provisions  of  this  Act,  from  which  no  appeal, 
writ  of  error,   or   supersedeas   has   been   taken,   for   thirty 


—113— 

clays  after  the  rendition  of  such  judgment  or  decree,  it  shall 
forfeit  all  right  to  do  business  under  this  Act. 

Sec.  7.  Be  it  further  enacted.  That  any  company  which 
shall  execute  or  guarantee  any  recognizance,  stipulation, 
bond  or  undertaking  under  the  provisions  of  this  Act  shall 
be  estopped  in  any  proceeding  to  enforce  the  liability  which 
it  shall  have  assumed  to  incur,  to  deny  its  corporate  power 
to  execute  or  guarantee  such  instrument  or  assume  such 
liability. 

Sec.  8.  Be  it  further  enaeted,  That  any  company  doing 
business  under  the  provisions  of  this  Act  which  shall  fail  to 
comply  with  any  of  its  provisions  shall  forfeit  to  the  State 
of  Tennessee  for  every  such  failure  not  less  than  $500  nor 
more  than  $5,000,  to  be  recovered  by  suit  in  the  name  of  the 
State  of  Tennessee,  in  the  same  courts  in  which  suit  may 
be  brought  against  such  company  under  the  provisions  of 
this  Act,  and  such  failure  shall  not  afifect  the  validity  of  any 
contract  entered  by  such  company. 

Sec.  9.  Be  it  further  enaeted,  That  before  any  surety 
company  shall  be  authorized  to  execute  the  bonds  referred 
to  in  this  Act,  it  shall  deposit  in  the  office  of  the  State 
Treasurer  of  this  State  one  hundred  thousand  ($100,000) 
dollars  in  lawful  money  of  the  United  States,  or  an  equal 
amount  in  the  bonds  of  the  United  States  or  of  the  State  of 
Tennessee,  said  bonds  to  be  estimated  at  their  actual  value, 
and  said  deposit  shall  be  continually  kept  at  said  amount 
during  the  time  the  corporation  or  company  remains  bound 
upon  any  bond  or  obligation  as  contemplated  in  this  Act. 

The  said  deposit  shall  be  held  by  the  Treasurer  as  se- 
curity for  any  liability  incurred  by  the  company  making  said 
deposit,  by  reason  of  the  breach  of  any  bond  or  obligation 
referred  to  in  this  Act ;  Provided,  hozvever.  That  any  surety 
company  incorporated  under  the  laws  of  any  other  State  or 
government,  and  having  a  general  deposit  in  some  State 
of  the  United  States  of  a  sum  not  less  than  $100,000,  con- 
sisting of  lawful  money  of  the  United  States,  or  an  equal 
amount  in  the  bonds  of  the  United  States,  or  of  any  State, 


—114— 

the  value  of  which  shall  be  at  or  above  par,  as  security  for 
any  liability  incurred  under  this  Act,  shall  be  required  to 
deposit  only  the  sum  of  $25,000  in  the  State,  consisting-  of 
lawful  money  of  the  United  States,  or  an  equal  amount  in 
the  bonds  of  the  United  States,  or  of  the  State  of  Tennessee ; 
Provided,  further,  That  said  surety  company,  organized 
under  the  laws  of  any  other  State  or  government,  and  hav- 
ing such  general  deposit,  shall  file  with  the  Treasurer  of 
this  State  a  certificate  from  the  officer  of  the  State  with 
whom  said  general  deposit  has  been  made,  showing  that  the 
said  company  has  deposited  with  the  said  officer  $100,000 
in  lawful  money  of  the  United  States,  or  an  equal  amount 
in  bonds  of  the  United  States  or  of  any  State,  for  the  bene- 
fit of  all  liabilities  of  said  company  in  any  or  all  States. 

Sec.  10.     Be  it  further  enacted.  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  May  13,  1895. 
Approved  May  14,  1895. 


-US- 


OFFICIAL  SURETY  BONDS. 

(Amendatory.) 


CHAPTER  360,  ACTS  OF  1905. 

AN  ACT  to  amend  "An  Act  relative  to  recognizances,  stipulations, 
bonds,  and  undertakings,  and  to  allow  certain  corporations  to  be 
accepted  as  surety  thereon,"  being  Chapter  175  of  the  Acts  of 
1895,  approved  May  14,  1895. 

Section  i.  Be  it  enacted  by  the- General  Assembly  of 
the  State  of  Tennessee,  That  Section  9  of  the  said  Act  of 
1895,  Chapter  175,  be  amended  by  striking  out  the  second 
paragraph  of  said  section  and  substituting  the  following: 

"The  said  deposit  shall  be  held  by  the  Treasurer  as  se- 
curity for  any  liability  incurred  by  the  company  making  said 
deposit  by  reason  of  the  breach  of  any  bond  or  obligation 
referred  to  in  this  Act;  Provided,  however,  That  said  surety 
company  organized  under  the  laws  of  any  other  State  or 
government,  and  having  a  general  deposit  in  some  State  of 
the  United  States  of  a  sum  not  less  than  $100,000,  consist- 
ing of  lawful  money  of  the  United  States,  or  of  an  equal 
amount  in  the  bonds  of  the  United  States,  or  of  any  State, 
the  value  of  which  shall  be  at  or  above  par,  as  security  for 
any  liability  incurred  under  this  Act,  shall  be  required  to 
keep  on  deposit  only  the  sum  of  $25,000  in  the  State,  con- 
sisting of  lawful  money  of  the  United  States,  or  an  equal 
amount  in  the  bonds  of  the  United  States,  or  of  the  State  of 
Tennessee;  Provided,  further,  That  no  deposit  in  this  State 
shall  be  required  of  any  company  organized  under  the  laws 
of  any  other  State  or  government,  which  has  an  actual  paid- 
up  cash  capital  of  $300,000,  of  which  at  least  $200,000  shall 
be  invested  in  the  bonds  of  the  United  States,  or  other  good 
securities,  to  be  itemized  and  certified  as  such  by  the  Insur- 
ance Commissioner  of  the  State  in  which  said  sum  is  de- 
posited, reckoning  same  at  their  current  market  value,  and 
to  be  approved  by  the  Insurance  Commissioner  of  Tennes- 


— ii6 — 

see,  which  $200,000  shall  be  deposited  with  and  held  by 
some  Insurance  Commissioner  or  other  proper  officer  of 
some  State  of  the  United  States,  as  security  for  the  protec- 
tion of  all  policy  holders  and  creditors  in  the  United  States ; 
Provided,  further,  That  said  surety  company  organized 
under  the  laws  of  any  other  State  government,  and  hav- 
ing such  general  deposit,  shall  file  with  the  Treasurer  of 
this  State  a  certificate  from  the  officer  of  the  State  with 
whom  said  general  deposit  has  been  made,  showing  that 
the  said  company  has  deposited  with  the  said  officer  the 
sums  required  in  the  lawful  money  of  the  United  States,  or 
an  equal  amount  in  the  securities  above  provided  for,  for  the 
benefit  of  all  liabilities  of  said  company  in  any  or  all  States." 

Sec.  2.     Be  it  further  enaeted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  March  28,  1905. 
Approved  April  12,  1905. 


—  117— 


PARTIAL  VALUED  POLICY  LAW. 


CHAPTER  107,  ACTS  OF  1893. 

AN  ACT  to  compel  insurance  companies  to  pay  the  full  amount 
of  loss  sustained  upon  property  covered  by  policies  of  insur- 
ance up  to  the  amount  expressed  in  the  policies,  notwithstand- 
ing any  stipulation  in  such  policies  to  the  contrary. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  insurance  companies  shall  pay 
their  poHcy  holders  the  full  amount  of  loss  sustained  upon 
property  insured  by  them ;  Provided,  Said  amount  of  loss 
does  not  exceed  the  amount  of  insurance  expressed  in  the 
policy,  and  that  all  stipulations  in  such  policies  to  the  con- 
trary are,  and  shall  be,  null  and  void ;  Provided,  hozvever, 
That  insurance  policies  issued  upon  cotton  in  bales  shall 
not  be  subject  to  the  provisions  of  this  Act. 

Sec.  2.  Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring;-  it. 

Passed  March  23,  1893. 

Approved  April  10,  1893. 


— IIS — 


OPTIONAL  USE   OF   CO-INSURANCE 

AND  THREE-QUARTERS 

VALUE  CLAUSE. 

(Amendatory.) 


CHAPTER  539,  ACTS  OF  1903. 

AN  ACT  to  amend  An  Act  to  compel  insurance  companies  to  pay 
the  full  amount  of  the  loss  sustained  upon  property  covered  by 
policies  of  insurance  up  to  the  amount  expressed  in  the  policies, 
notwithstanding  any  stipulation  in  such  policies  to  the  contrary. 
And  being  Chapter  107  of  the  Acts  of  the  General  Assembly  for 
the  year  1893,  by  providing  for  the  validation  of  the  three-fourths 
value  clause  and  the  co-insurance  clause  under  certain  condi- 
tions. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  an  Act  entitled  "An  Act  to 
compel  insurance  companies  to  pay  the  full  amount  of  the 
loss  sustained  upon  property  covered  by  policies  of  insur- 
ance up  to  the  amount  expressed  in  the  policies,  notwith- 
standing any  stipulation  in  such  policies  to  the  contrary," 
being  Chapter  107  of  the  Acts  of  the  General  Assembly  of 
the  State  of  Tennessee  for  the  year  1893,  be,  and  the  same 
is  hereby,  amended  by  adding  at  the  end  of  the  first  Sec- 
tion of  said  Act  the  following : 

"Provided,  however.  That  a  three-quarter  value  limit 
clause  may  be  applied  to  a  policy  of  insurance  if  it  is  left 
optional  with  the  insured,  whether  he  will  accept  said  clause 
or  not,  and  said  option  is,  in  fact,  given  him,  and  when 
accepted  by  the  policy  holder  it  shall  be  a  valid  contract 
between  the  company  and  the  policy  holder;  Provided,  how- 
ever. That  said  clause  shall  be  absolutely  void,  even  if  ac- 
cepted by  the  policy  holder,  except  under  the  following 
conditions,  to-wit : 

"i.  Said  three-fourths  clause  shall  be  printed  in  bold 
type  across  the  face  of  the  policy  or  on  a  separate  form  as 


— 119 — 

a  special  agreement — this  separate  form  to  be  also  printed 
in  clear  type  of  reasonable  size — and  it  shall  provide  therein, 
in  event  of  loss,  if  it  appears  that  there  is  an  excess  in  the 
face  of  the  policy  over  and  above  seventy-five  per  cent.  (75 
per  cent.)  of  the  cash  value  of  the  property  insured,  that 
the  company  shall  return  to  the  assured  all  premiums  that 
have  been  paid  on  such  excess,  and  it  shall  also  be  a  condi- 
tion precedent  to  the  validity  of  said  three-fourths  value 
limit  clause  that  the  insurance  company  has  given  to  the 
insured  accepting  such  a  clause  upon  any  policy  not  less 
than  twenty-five  per  cent.  (25  per  cent.)  reduction  from 
the  present  basis  rate,  as  shozmi  by  the  rate  sheets  in  the 
office  of  the  Insurance  Commissioner,  and,  if  the  basis  rate 
should  be  lowered,  then  said  reduction  of  not  less  than 
twenty-five  per  cent,  shall  be  given  from  such  lowered  basis 
rate,  but  if  in  any  case  the  basis  rate  be  raised  from  the 
present  existing  rate,  said  three-fourths  clause,  even  if 
applied  with  the  consent  of  the  assured,  and  said  reduction 
given,  it  shall  be  absolutely  null  and  void  as  to  said  policy ; 

"Provided,  also,  A  co-insurance  clause  in  a  policy,  or 
attached  in  the  form  of  a  rider,  shall  be  valid  if  printed  in 
clean,  bold  type,  either  across  the  face  of  the  policy  or  on 
'  said  rider,  and  accepted  by  the  insured  after  the  option  to 
accept  same  or  reject  same  has  been  given  him;  Provided, 
That  if  said  co-insurance  clause  is  accepted  by  the  policy 
holder,  it  shall  be  a  condition  precedent  to  its  validity  that 
the  assured  has  been  allowed  a  reduction  from  the  present 
basis  rate,  as  shown  by  rate  sheet  now  on  file  in  the  office 
of  the  Insurance  Commissioner  of  not  less  than  five  per 
cent,  on  a  seventy  per  cent,  co-insurance  clause ;  not  less 
than  ten  per  cent,  on  an  eighty  per  cent,  co-insurance  clause ; 
and  not  less  than  fifteen  per  cent,  on  a  ninety  per  cent,  co- 
insurance clause ;  and  if  the  present  basis  rate  is  lowered, 
the  insured  shall  receive  the  benefit  of  the  same  reduction 
upon  the  lowered  rate,  but  if  the  basis  rate  is  raised  in  any 
case,  said  co-insurance  clause  shall  be  void  as  to  said  poHc}-, 
although  the  insured  has  received  the  benefit  of  the  reduced 
rate ; 


— 120 

Provided,  further,  That  said  co-insurance  clause  shall 
apply  only  to  cities  and  towns  in  this  State  having  a  popu- 
lation of  more  than  15,000  by  the  census  of  1900  or  any 
subsequent  Federal  census. 

"Sec.  2.     Be  it  further  enacted.  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it." 
Passed  April  14,  1903. 
Approved  April  15,  1903. 


-121- 


ANTI-COMPACT  LAW. 


CHAPTER  479,  ACTS  OF  1905. 

AN  ACT  to  prevent  any  agreement  between  fire  insurance 'com- 
panies doing  business  in  Tennessee  to  maintain  rates  to  be 
charged  for  insurance  on  property  located  in  this  State,  and  to 
prescribe  penalties  for  violations  of  this  Act. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  it  shall  be  unlawful  for  any 
two  or  more  fire  insurance  companies  doin^  business  in 
Tennessee,  or  any  two  or  more  agents  or  representatives 
of  fire  insurance  companies  doing  business  in  Tennessee, 
to  enter  into  any  contract,  compact,  or  agreement  looking 
to  the  maintaining  of  any  specific  rates  to  be  charged  for 
insurance  on  any  property  located  in  this  State;  Provided, 
That  this  Act  shall  not  be  so  construed  as  to  prohibit  the 
formation  of  associations  of  fire  insurance  agents  in  any 
city,  town  or  county  in  this  State  for  the  purpose  of  minim- 
izing expenses  by  the  employment  of  joint  inspectors  or  ex- 
perts for  preparing  rating  schedules  and  designating  im- 
provements, with  a  view  to  the  reduction  of  the  cost  of  in- 
surance; Provided,  That  all  rates  which  may  be  suggested 
through  such  associations  shall  be  advisor>^  only,  and  not 
binding  on  any  member  thereof;  Provided,  further.  That  if 
any  board  of  agents  or  agent  or  company  attempt  to  im- 
pose any  fine  upon  any  agent  or  company  who  shall  refuse 
to  write  at  any  rate  other  than  that  fixed  by  such  board, 
shall  be  guilty  of  a  misdemeanor  and  subject  to  a  fine  of  not 
less  than  fifty  dollars. 

Sec.  2.  Be  it  further  enacted,  That  it  shall  be  unlawful 
for  any  one  or  more  agents,  or  association  of  fire  insurance 
agents  in  any  city,  town,  or  county  of  this  State,  to  impose 
any  penalty  upon  any  agent  because  of  any  rate  which  may 
be  charged  for  insurance  by  said  agent  or  any  member  of 
said  association. 


— 122 — 

Sec.  3.  Be  it  further  enacted,  That  any  fire  insurance 
company  doing  business  in  Tennessee  found  guilty  of  a  vio- 
lation of  Section  i  of  this  Act  shall  be  subject  to  a  penalty 
in  a  sum  not  less  than  one  hundred  ($100)  dollars  nor  ex- 
ceeding one  thousand  ($1,000)  dollars,  to  be  recovered  by 
action  in  the  name  of  the  State  upon  relation  of  the  Insur- 
ance Commissioner,  to  be  instituted  by  the  Attorney-General 
of  the  State,  or  any  District  Attorney-General  under  his 
direction,  in  any  Circuit  or  Chancery  Court,  and  the  amount 
so  recovered  shall  be  paid  into  the  State  Treasury,  and  in 
addition  the  company  so  offending  shall  be  subject  to  the 
revocation  of  its  license  to  do  business  in  this  State,  in  the 
discretion  of  the  Insurance  Commissioner. 

Sec.  4.  Be  it  further  enaeted,  That  any  agenf^or  officer 
of  any  association  of  agents  violating  the  provisions  of  Sec- 
tion 2  of  this  Act  shall  be  guilty  of  a  misdemeanor  and 
shall,  upon  conviction,  be  fined  not  less  than  $100  nor  more 
than  $500. 

Sec.  5.  Be  it  further  enaeted.  That  it  shall  be  the  duty 
of  the  Insurance  Commissioner,  upon  complaint  of  any  citi- 
zen of  this  State,  or  upon  his  own  initiative,  to  make  in- 
vestigation as  to  violations  of  this  Act,  and  if,  upon  investi- 
gation, he  finds  that  there  is  sufficient  justification  for  such 
proceedings,  he  shall  lay  the  facts  before  the  Attorney- 
General  of  this  State,  and  shall  authorize  the  District 
Attorney-General  to  enter  his  name  as  prosecutor  in  any 
criminal  proceedings  to  be  instituted  for  a  violation  of  this 
Act ;  Provided,  That  this  shall  not  be  so  construed  as  to 
prevent  any  citizen  from  acting  as  prosecutor  in  such  cases. 

Sec.  6.     Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  14,  1905. 
Approved  April  17,  1905. 


-123— 


RESIDENT  AGENTS'  LAW. 


CHAPTER  430,  ACTS  OF  1899. 

AN  ACT  to  prevent  fire,  fire  marine,  or  marine  insurance  compa- 
nies or  associations  not  incorporated  under  the  laws  of  this  State 
from  placing,  writing,  or  causing  to  be  written  or  placed,  con- 
tracts or  policies  of  insurance  covering  property  located  in  this 
State  or  otherwise  than  through  resident  local  agents. 

Section  i.  Be  it  enacted  by  the  General  Asscmhly  of 
the  State  of  Tennessee,  That  no  fire,  fire  marine,  or  marine 
insurance  company  or  association  not  incorporated  tmder 
the  laws  of  this  State,  authorized  to  transact  business  herein, 
shall  make,  write,  place,  or  cause  to  be  made,  written  or 
placed,  any  policy,  duplicate  policy,  or  contract  of  insurance 
of  any  kind  or  character,  or  any  general  or  floating  policy, 
upon  property  situated  or  located  in  this  State,  except  after 
the  said  risk  has  been  approved,  in  writing,  by  a  local  agent 
who  is  a  resident  in  this  State,  regularly  commissioned  and 
licensed  to  transact  insurance  business  herein,  who  shall 
countersign  all  policies  so  issued  or  contracts  of  insurance, 
and  receive  the  full  commission  thereon,  when  the  premium 
is  paid,  to  the  end  that  the  State  may  receive  the  taxes  re- 
quired by  law  to  be  paid  on  the  premiums  collected  for  in- 
surance on  all  property  located  in  this  State;  Provided,  how- 
ever. That  nothing  in  this  Act  shall  be  construed  to  pre- 
vent any  such  company  or  association  authorized  to  trans- 
act business  in  this  State  from  contracting  for  insurance 
at  its  principal  or  department  ofiices  covering  property  in 
this  State ;  Provided,  That  policies  are  issued  and  counter- 
signed by  and  entered  in  the  usual  form  on  records  of  the 
local  agents,  who  are  residents  of  this  State,  and  licensed 
to  transact  the  business  of  insurance  in  this  State,  and  re- 
ceive the  full  commission  thereon  when  paid.  No  provision 
of  this  section  is  intended  to  or  shall  apply  to  direct  insur- 
ance covering  the  rolling  stock  of  railroad  corporations,  or 
property  received  for  shipment  or  delivery  in  transit  while 


124 — 

in  the  possession  and  custody  of  railroad  corporations,  or 
other  common  carriers  of  freight,  merchandise  or  passen- 
gers. 

Sec.  2.  Be  it  further  enacted,  That  renewal  of  license 
to  transact  the  business  of  fire,  fire  marine,  or  marine  in- 
surance in  this  State  for  companies  or  associations  not  in- 
corporated under  the  laws  of  this  State,  shall  only  be  issued 
after  the  secretary  or  manager  of  such  company  or  asso- 
ciation so  desiring  to  renew  license  to  do  business  in  this 
State  shall  have  first  made  oath  that  no  policy  or  contract 
of  insurance  covering  property  located  in  the  State  of  Ten- 
nessee has  been  issued,  written  or  placed  during  the  twelve 
months  preceding,  except  by  resident  local  agents  of  such 
company  or  association  in  Tennessee,  duly  commissioned, 
and  until  and  after  such  company  or  association  shall  have 
complied  with  all  other  laws  of  this  State  in  respect  to  the 
admission  of  companies  of  other  States  and  foreign  coun- 
tries. 

Sec.  3.  Be  it  further  enacted,  That  whenever  the  In- 
surance Commissioner  shall  have  received  information  that 
any  fire,  fire  marine,  or  marine  insurance  company  or  asso- 
ciation, not  incorporated  under  the  laws  of  this  State,  has 
violated  any  of  the  provisions  of  Section  i  of  this  Act,  he 
is  authorized,  at  the  expense  of  such  company  or  associa- 
tion, to  examine  by  himself  or  his  accredited  representative, 
at  the  principal  office  or  offices  of  such  company  or  associa- 
tion, located  in  the  United  States  of  America  or  in  any  for- 
eign country,  and  also  at  such  offices  or  agencies  of  such 
company  or  association  as  he  may  deem  proper,  all  books, 
records,  and  papers  of  such  company  or  association,  and  he 
may  examine  under  oath  the  officers,  managers,  and  agents 
of  such  company  or  association  as  to  such  violation  or  viola- 
tions. The  refusal  of  any  such  company  or  association  to 
submit  to  such  examination,  or  to  exhibit  its  books  and 
records  for  inspection,  shall  constitute  a  forfeiture  of  its 
license  as  hereinafter  provided  for. 

Sec.  4.  Be  it  further  enacted,  That  if  any  fire,  fire 
marine,  or  marine  insurance  company  or  association  shall 


—  125— 

violate  or  fail  to  observe  and  comply  with  any  or  all  of  the 
provisions  of  this  Act  applicable  thereto,  it  immediately 
shall  become  the  duty  of  the  Insurance  Commissioner  to 
investigate  same,  and  if  the  Insurance  Commissioner  is  him- 
self satisfied  as  to  the  guilt  of  the  insurance  company  or 
association,  it  shall  be  the  duty  of  the  Insurance  Commis- 
sioner, in  the  manner  now  provided  by  law,  to  revoke  the 
license  of  such  company  or  association  to  transact  business 
in  this  State,  and  such  revocation  shall  continue  for  at  least 
one  year  from  the  date  thereof,  nor  shall  any  insurance 
company  or  association  whose  authority  to  transact  busi- 
ness in  this  State  shall  have  been  so  revoked,  be  again  au- 
thorized or  permitted  to  transact  business  herein  until  it 
shall  have  filed  in  the  ofifice  of  the  Insurance  Commissioner 
a  certificate,  signed  by  its  president  or  other  chief  officer, 
to  the  efifect  that  terms  and  obligations  of  the  provisions  of 
this  Act  are  accepted  by  it  as  a  part  of  the  condition  of  its 
right  and  authority  to  transact  business  in  this  State. 

Sec.  5.  Be  it  further  enacted.  That  under  this  Act  is  also 
included  citizens  of  this  State  procuring  and  holding  insur- 
ance contracts  or  policies  in  fire,  fire  marine,  or  marine  in- 
surance companies  or  associations  upon  property  situated 
or  located  in  this  State,  in  companies  not  authorized  to 
transact  business  in  this  State ;  that  the  procuring  or  accept- 
ing policies  or  contracts  of  such  insurance  in  such  unauthor- 
ized companies  or  associations  makes  liable  every  citizen 
holding  such  contracts  or  policies  for  taxes,  the  same  as  if 
each  company  or  association  was  duly  avithorized  to  trans- 
act business  in  the  State. 

Sec.  6.  Be  it  further  enacted.  That  all  laws  and  parts 
of  laws  in  conflict  with  this  Act  be,  and  the  same  are  hereby, 
repealed. 

Sec.  7.  Be  it  further  enacted.  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 

Passed  April  19,  1899. 

Approved  April  24,  1899. 


126 


PENALTY   IMPOSED   ON    INSURANCE 

COMPANIES  FOR  DELAY  IN 

PAYING  LOSSES. 


CHAPTER  141,  ACTS  OF  1901. 

AN  ACT  to  impose  additional  liability  upon  insurance  companies 
and  other  corporations,  firms  or  persons,  for  failure  to  promptly 
pay  insurance  losses  and  a  liability  upon  policy  holders  where 
suits  are  not  brought  in  good  faith. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  the  several  insurance  com- 
panies of  this  State,  and  foreign  insurance  companies  and 
other  corporations,  firms,  or  persons  doing  an  insurance 
business  in  this  State,  in  all  cases  where  a  loss  occurs  and 
they  refuse  to  pay  the  same  within  sixty  days  after  a  de- 
mand shall  have  been  made  by  the  holder  of  said  policy  on 
which  said  loss  occurred,  shall  be  liable  to  pay  the  holder 
of  said  policy,  in  addition  to  the  loss  and  interest  thereon, 
a  sum  not  exceeding  twenty-five  per  cent,  on  the  liability  for 
said  loss ;  Provided,  That  it  shall  be  made  to  appear  to  the 
court  or  jury  trying  the  case  that  the  refusal  to  pay  said 
loss  was  not  in  good  faith,  and  that  such  failure  to  pay  in- 
flicted additional  expense,  loss,  or  injury  upon  the  holder  of 
said  policy;  And,  provided,  further.  That  such  additional 
liability,  within  the  limit  prescribed,  shall,  in  the  discretion 
of  the  court  or  jury  trying  the  case,  be  measured  by  the 
additional  expense,  loss,  and  injury  thus  entailed. 

Sec.  2.  Be  it  further  enacted,  That  in  the  event  it  shall 
be  made  to  appear  to  the  court  or  jury  trying  the  cause 
that  the  action  of  said  policy  holder  in  bringing  said  suit 
was  not  in  good  faith,  and  recovery  under  said  policy  shall 
not  be  had,  said  policy  holder  shall  be  liable  to  such  insur- 
ance companies,  corporations,  firms  or  persons  in  a  sum  not 
exceeding  twenty-five  per  cent,  of  the  amount  of  the  loss 
claimed  under  said  policy;  Provided,  That  such  liability, 


127 — 

\yithin  the  limit  prescribed,  shall,  in  the  discretion  of  the 
court  or  jury  trying  the  cause,  be  measured  by  the  addi- 
tional expense,  loss,  or  injury  inflicted  upon  said  insurance 
companies,  corporations,  firms  or  persons  by  reason  of  said 
suit. 

Sec.  3.  Be  it  further  enacted,  That  all  x*\cts  and  parts 
of  Acts  in  conflict  with  this  Act  be,  and  the  same  are  hereby 
repealed,  and  that  this  Act  take  effect  from  and  after  its 
passage,  the  public  welfare  requiring  it. 

Passed  April  16,  1901. 

Approved  April  18,  1901. 


—  128— 


INDORSEMENTS  ON   LIFE  INSUR- 
ANCE POLICIES. 


CHAPTER  392,  ACTS  OF  1905. 

AN  ACT  to  require  all  life  insurance  companies,  other  than  frater- 
nal beneficiary  associations,  to  print  or  stamp  in  conspicuous  type 
on  each  policy  of  insurance,  sold  to  citizens  of  this  State,  words 
indicating  the  kind  or  character  of  such  policy,  the  same  to  be 
.approved  by  the  Insurance  Commissioner. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  all  life  insurance  companies, 
other  than  fraternal  beneficiary  associations,  authorized  to 
do  the  business  of  life  insurance  in  the  State  of  Tennessee 
be,  and  the  same  are  hereby,  required  to  print  or  stamp  in 
conspicuous  type,  on  the  face  or  first  page  of  each  and  every 
policy  sold  to  citizens  of  this  State,  words  indicating  cor- 
rectly and  fully  the  kind  and  character  of  the  policy.  The 
same  words  shall  also  be  printed  or  stamped  on  the  back  or 
title  page  of  ever}'  such  policy,  so  that  they  may  be  easily 
seen  and  read  when  the  policy  is  folded. 

Sec.  2.  Be  it  further  enacted,  That  every  such  life  in- 
surance company  shall  submit  to  the  Insurance  Commis- 
sioner for  his  approval  the  words  required  in  Section  i  of 
this  Act  to  be  printed  on  each  policy,  together  with  sample 
copy  of  every  kind  or  class  of  policies  offered  for  sale  in 
this  State,  and  every  life  insurance  company  shall  print  on 
each  of  its  policies  sold  to  citizens  of  this  State  such  words 
as  the  Insurance  Commissioner  shall  approve. 

Sec.  3.  Be  it  further  enacted,  That  the  license  of  any 
insurance  company  doing  business  in  this  State  may  be  re- 
voked by  the  Insurance  Commissioner  for  violating  any  of 
the  provisions  of  this  Act. 

Sec.  4.  Be  it  further  enacted.  That  this  Act  shall  take 
effect  from  and  after  July  i,  1905,  the  public  welfare  re- 
quiring it. 

Passed  April  12,  1905. 

Approved  April  14,  1905. 


—  129 — 


ANNUAL  PUBLICATION  OF  UN 
CLAIMED  DIVIDENDS. 


(Section  1830,  Code  of  1858.) 

Every  insurance  company  doing  business  in  this  State 
shall,  on  the  first  day  of  January  each  year,  and  for  thirty 
days  thereafter,  cause  to  be  published  in  one  newspaper 
printed  in  the  city  of  Nashville,  a  full  and  accurate  state- 
ment, verified  by  the  oath  of  the  presiding-  officer,  of  the 
dividends  and  profits  declared  and  payable  upon  stock, 
bonds,  or  other  evidences  of  indebtedness  which  remain  un- 
claimed by  the  person  entitled  thereto. 

(Shannon's  Code,  Section  3346.) 


— i3c^- 


LIFB   INSURANCE   NOT   SUBJECT    TO 
CLAIMS  OF  CREDITORS. 


(Sections  2294,  2478  and  2479,  Code  of  1858.) 

A  life  insurance  effected  by  a  husband  on  his  own  life 
shall  inure  to  the  benefit  of  the  widow  and  next  of  kin,  to 
be  distributed  as  personal  property  free  from  the  claims  of 
his  creditors.     [Shannon's  Code,  Section  4030.] 

Any  life  insurance  effected  by  a  husband  on  his  own  life 
shall,  in  case  of  his  death,  inure  to  the  benefit  of  his  widow 
and  children,  and  the  money  thence  arising  shall  be  divided 
between  them  according  to  the  law  of  distributions,  without 
being  in  any  manner  subject  to  the  debts  of  the  husband, 
whether  by  attachment,  execution,  or  otherwise.  [Shannon's 
Code,  Section  4231.] 

Whenever  a  married  woman  causes  a  life  insurance  to  be 
effected  on  her  husband's  life,  it  shall  in  no  case  be  subject 
to  execution  or  attachment  for  the  debts  of  the  husband, 
but  shall  inure  to  the  benefit  of  the  widow  and  children. 
[Shannon's  Code,  Section  4232.] 


—131- 


CAPITAL  STOCK  OF  FOREIGN  INSUR- 
ANCE COMPANIES  NOT 
TAXABLE. 


CHAPTER  21,  ACTS  OF  1897. 

Whereas,  It  has  been,  and  is  the  opinion  of  some  that  any  life, 
fire,  marine,  accident  or  other  insurance  companies,  and  all  other 
companies  other  than  those  chartered  in  the  State,  who  have  filed,  or 
may  file,  their  charters  of  incorporation  in  this  State,  would  be  lia- 
ble under  the  laws  of  this  State  for  a  State  and  county  ad  valorem 
tax  on  their  capital  stock  located  and  kept  in  other  States ;  and. 

Whereas,  Several  insurance  companies  acting  under  this  belief 
have  in  the  last  two  years  withdrawn  from  the  State,  thereby  depriv- 
ing the  State  of  a  large  amount  of  revenue;  now,  therefore. 

Section  i.  Be  it  enacted  hy  the  General  Assembly  of 
the  State  of  Tennessee,  That  no  life,  fire,  marine,  accident, 
or  other  insurance  companies,  or  other  companies  having 
their  capital  stock  wholly  outside  of  the  State  of  Tennessee, 
shall  be  required  to  pay  any  tax  on  its  capital  stock  for  do- 
ing business  in  this  State. 

Sec.  2.     Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  May  11,  1895. 
Approved  May  13,  1895. 


—  132— 


PRIVILEGE  TAXES  OF   DELINQUENT 

INSURANCE  AGENTS  COLLECTED 

BY  COUNTY  COURT  CLERKS. 


CHAPTER  21,  ACTS  OF  1897. 

AN  ACT  to  further  enforce  the  collection  of  the  State  tax  from  in- 
surance agents  as  provided  in  Chapter  4,  Acts  of  1895,  second 


Whereas,  By  the  provisions  of  Section  3  of  Chapter  4 
of  the  Acts  of  1895,  Second  Session,  it  is  required  of  each 
insurance  agent,  writing  or  sohciting  insurance  in  this 
State,  to  pay  a  tax  of  ten  dollars  per  annum  direct  to  the 
Treasurer  of  the  vState;  and. 

Whereas,  It  is  not  possible,  under  the  present  law,  for 
the  Treasurer  to  enforce  the  collection  of  this  tax  from  all 
agents ;  therefore, 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  in  order  to  further  enforce 
the  collection  of  this  tax,  the  Treasurer  of  the  State,  when- 
ever any  insurance  agent  has  failed  or  refused  to  make 
payment  of  the  required  tax,  may  report  such  agent  to  the 
County  Court  Clerk  of  the  county  in  which  such  agent  re- 
sides, as  a  delinquent,  and  it  shall  then  become  the  duty  of 
the  County  Court  Clerk  to  enforce  the  collection  of  the  tax 
from  such  agent  by  the  means  usually  employed  for  the  en- 
forcement of  the  collection  of  privilege  taxes,  and  the  Coun- 
ty Court  Clerk  may  add  a  penalty  of  50  per  cent,  to  the 
amount  of  the  tax,  one-half  of  which  penalty  he  may  retain 
as  compensation  for  his  services,  and  the  other  one-half  to 
be  by  him  accounted  for  and  paid  into  the  Treasury  in  like 
manner  as  the  tax. 

Sec.  2.  Be  it  further  enacted,  That  it  shall  be  the  duty 
of  the  County  Court  Clerk  to  report  at  once  to  the  Treas- 


—133— 

urer  of  the  State  the  tax  collected  by  him  under  this  law, 
giving  the  name  and  postoffice  address  of  the  agent  from 
whom  collected,  and  it  shall  be  the  duty  of  the  Treasurer 
to  furnish  the  County  Court  Clerk  with  a  receipt  which 
shall  show  the  name  and  postoffice  address  of  each  agent, 
and  the  amount  paid  by  each. 

Sec.  3.  Be  it  further  enacted.  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  January  19,  1897. 
Approved  January  22,  1897. 


—134— 


TAX  ON  PREMIUMS  PAYABLE  AS 

LONG  AS  INSURANCE  IS 

IN  FORCE. 


CHAPTER  442,  ACTS  OF  1903. 

AN  ACT  to  prescribe  the  conditions  as  to  license  and  taxation  upon 
which  foreign  insurance  companies  shall  enter  or  remain  in  this 
State  for  the  transaction  of  business. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  all  licenses  authorizing  for- 
eign insurance  companies  to  transact  their  business  in  the 
State  of  Tennessee  shall  terminate  or  expire  with  the  last 
day  of  the  year  during  which  they  were  issued. 
'  Sec.  2.  Be  it  further  enacted,  That  all  foreign  insur- 
ance companies  which  shall  hereafter  take  out  or  renew  a 
license  to  transact  business  in  this  State  shall,  upon  the 
expiration  of  their  license  for  any  cause,  or  upon  their 
ceasing  to  transact  new  business  in  this  State,  continue  to 
pay  the  same  tax  upon  their  business  remaining  in  force 
in  this  State,  and  in  like  manner,  and  at  like  times,  as  other 
insurance  companies  of  the  same  class,  which  are  duly 
licensed,  are  required  to  pay  by  any  current  law  in  force  at 
such  time. 

Sec.  3.  Be  it  further  enacted,  That  such  foreign  com- 
panies as  shall  fail  to  pay  the  tax  required  of  them  by 
this  Act  within  sixty  days  after  the  same  are  due,  shall  be 
liable  for  a  penalty  of  fifty  per  cent,  in  addition  thereto, 
recoverable  at  law  or  in  equity. 

Sec.  4.  Be  it  further  enacted,  That  a  compliance  with 
the  provisions  of  this  Act  shall  be  a  condition  upon  which 
any  foreign  insurance  company  shall  be  authorized  to  ob- 
tain or  renew  a  license,  and  that  the  acceptance  of  these 
terms  or  conditions  shall  be  conclusively  presumed  from 
the  taking  out  or  the  renewing  of  such  license. 


—135— 

Sec.  5.  Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  pubHc  welfare  requiring  it. 
Passed  April  13,  1903. 
Approved  April  15,  1903. 


—136— 

FORM   OF  CHARTER    OF  INSURANCE 
COMPANIES. 


CHAPTER  142,  ACTS  OF  1875. 

AN  ACT  to  provide  for  the  organization  of  corporations. 

Section  5.  Be  it  further  enacted,  That  the  general 
powers  of  all  corporations  chartered  for  purposes  of  indi- 
vidual profit,  the  provisions  of  and  restrictions  in  said  cor- 
poration shall  be  as  follows  : 

To  sue  and  be  sued  by  the  corporate  name ;  to  have 
and  use  a  common  seal,  which  it  may  alter  at  pleasure ; 
if  no  common  seal,  then  the  signature  of  the  name  of  the 
corporation  by  any  duly  authorized  officer  shall  be  legal 
and  binding;  to  purchase  and  hold  or  receive  by  gift  in 
addition  to  the  personal  property  owned  by  said  corpora- 
tion any  real  estate  necessary  for  the  transaction  of  the 
corporate  business,  and  also  to  purchase  or  accept  any  real 
estate  in  payment  or  part  payment  of  any  debt  due  to  the 
corporation,  and  sell  realty  for  corporation  purposes ;  to 
establish  by-laws  and  make  all  rules  and  regulations  not 
inconsistent  with  the  laws  and  the  constitution,  deemed 
expedient  for  the  management  of  corporate  afifairs.  and 
to  appoint  such  subordinate  officers  and  agents  in  addition 
to  president  and  secretary  or  treasurer  as  the  business  of 
the  corporation  may  require ;  designate  the  name  of  the 
office  and  fix  the  compensation  of  the  officers. 

The  following  provisions  and  restrictions  avo  coupled 
with  said  grant  of  powers :  A  failure  to  elect  officers  at 
the  proper  time  does  not  dissolve  the  corporation,  but 
those  in  office  hold  until  the  election  or  appointment  and 
qualification  of  their  successors.  The  term  of  all  officers 
may  be  fixed  by  the  by-laws  of  the  corporation ;  the  same 
not,  however,  to  exceed  two  years.  The  corporation  may, 
by  by-laws,  make  regulations  concerning  the   subscription 


—137— 

for,  or  transfer  of  stock ;  fix  upon  the  amount  of  capital 
to  be  invested  in  the  enterprise ;  the  division  of  the  same 
into  shares ;  the  time  required  for  payment  thereof  by  the 
subscribers  for  stock;  the  amount  to  be  called  for  at  any 
one  time ;  and  in  case  of  failure  of  any  stockholder  to  pay 
the  amount  thus  subscribed  by  him  at  the  time  and  in 
the  amounts  thus  called,  a  right  of  action  shall  exist  in  the 
corporation  to  sue  said  defaulting  stockholder  for  the  same. 
The  Board  of  Directors,  which  may  consist  of  five  or  more 
members,  at  the  option  of  the  corporation,  to  be  elected 
either  in  person  or  by  proxy,  by  a  majority  of  the  votes 
cast,  each  share  representing  one  vote,  shall  keep  a  full 
and  true  record  of  all  their  proceedings,  and  an  annual 
statement  of  receipts  and  disbujsemcnts  shall  be  copied  on 
the  minutes,  subject  at  all  times  to  the  inspection  of  any 
stockholder.  The  books  of  the  corporation  shall  show  the 
original  or  subsequent  stockholders;  their  respective  inter- 
ests ;  the  amount  which  has  been  paid  on  the  shares  sub- 
scribed; the  transfer  of  stock,  by  and  to  whom  made;  also 
other  transactions  in  which  it  is  presumed  a  stockholder 
or  creditor  may  have  an  interest. 

The  amount  of  any  unpaid  stock  due  from  a  subscriber 
to  the  corporation  shall  be  a  fund  for  the  payment  of  any 
debts  due  from  the  corporation,  nor  shall  the  transfer  of 
stock  by  any  subscriber  relieve  him  from  payment,  unless 
his  transferee  has  paid  up  all  or  any  of  the  balance  due  on 
said  original  subscription. 

By  no  implication  or  construction  shall  the  corporation 
be  deemed  to  possess  any  powers  except  those  hereby  ex- 
pressly given  or  necessarily  implied  from  the  nature  of  the 
business  for  which  the  charter  is  granted,  and  by  no  infer- 
ence whatever  shall  said  corporation  possess  the  power  to 
discount  notes  or  bills,  deal  in  gold  or  silver  coin,  issue  any 
evidence  of  debts  as  currency,  buy  and  sell  any  agricultural 
products,  deal  in  merchandise  or  engage  in  any  business 
outside  the  purpose  of  the  charter. 

The  right  is  reserved  to  repeal,  annul,  or  modify  this 
charter.     If  it  is  repealed,  or  if  the  amendments  proposed, 


-138- 

being  not  merely  auxiliary,  but  fundamental,  are  rejected 
by  a  vote  representing  more  than  half  of  the  stock,  the 
corporation  shall  continue  to  exist  for  the  purpose  of 
winding  up  its  affairs,  but  not  to  enter  upon  any  new 
business.  If  the  amendments  or  modifications,  being  fun- 
damental, are  accepted  by  the  corporation  as  aforesaid,  in 
a  general  meeting  to  be  called  for  that  purpose,  any  minor, 
married  woman,  or  other  person  under  disability,  or  any 
stockholder  not  agreeing  to  the  acceptance  of  the  modifica- 
tion, shall  cease  to  be  a  stockholder,  and  the  corporation 
shall  be  liable  to  pay  said  withdrawing  stockholders  the  par 
value  of  their  stock,  if  it  is  worth  so  much ;  if  not,  then  so 
much  as  may  be  its  real  value  in  the  market,  on  the  day  of 
the  withdrawal  of  said  stockholders,  as  aforesaid ;  Provided, 
That  the  claims  of  all  creditors  are  to  be  paid  in  preference 
to  said  withdrawing  stockholders. 

A  majority  of  the  Board  of  Directors  shall  constitute  a 
quorum,  and  shall  fill  all  vacancies  until  the  next  election. 
The  first  Board  of  Directors  shall  consist  of  the  five  or 
more  corporators  who  shall  apply  for  and  obtain  the  char- 
ter. The  said  corporation  may  have  the  right  to  borrow 
money,  and  issue  notes  or  bonds  upon  the  faith  of  the  cor- 
porate property,  and  also  to  execute  a  mortgage  or  mort- 
gages, as  further  security  for  repayment  of  money  thus  bor- 
rowed. 

^  ^  ^J:  ^  :4^  5:C  ^  ^:  ;|<  ^tc  ^  ^  ;}c  ;fc  5{c 

Sec.  10.  Be  it  further  enacted,  That  the  form  for  the 
charter  of  an  insurance  company  shall  be  as  follows : 

"State  of  Tennessee — Charter  of  Incorporation. 

"Be  it  known,  That  (here  insert  the  names  of  five  or 
more  persons  not  under  twenty-one  years  of  age),  are 
hereby  constituted  a  body  politic  and  corporate,  by  the 
name  of  (here  insert  the  name  of  the  corporation). 

"The  general  powers,  etc.,  of  said  corporation  are"  (here 
insert  the  general  powers,  etc.,  as  in  Section  5.) 

The  said  company,  incorporated  as  aforesaid,  shall  have 


—139— 

the  power  to  make  insurance  against  losses  by  fire,  at  such 
rate  of  premium  and  upon  such  terms  and  conditions  as 
may  be  agreed  on,  on  any  house,  tenement,  manufactory 
or  other  building;  on  goods,  wares  or  merchandise,  and  on 
other  effects ;  on  hay,  grain,  and  other  agricultural  products 
in  barns  or  stacks ;  and  generally  to  insure  against  loss  by 
fire,  earthquakes,  storms  or  floods,  on  all  kinds  and  species 
of  property. 

The  said  company  shall  have  the  further  right  to  insure 
the  lives  of  persons,  and  engage  in  the  general  business  of 
life  insurance ;  and,  coupled  therewith,  the  right  to  grant 
and  sell  annuity,  or  contract  loans  based  on  life  annuity, 
with  bnefit  of  survivorship,  and  accept  and  execute  all  legal 
trusts  which  may  be  confided  to  said  company. 

That  said  company  shall  also  have  the  power  to  make 
insurance  against  all  accidents  to  property  in  transit ;  to  per- 
sons in  traveling;  against  disabilities  to  persons  by  disease 
or  sickness  or  other  bodily  infirmities  [Chapter  224,  Acts 
of  1889]  ;  or  against  thefts  of  property ;  and  also,  insur- 
ance upon  ships,  steamboats,  and  other  craft ;  upon  freights 
and  seamen's  wages,  including  all  marine  risks. 

The  Company  may,  at  its  option,  exercise  one  or  more, 
or  all  of  the  three  branches  of  business  in  which  it  is  au- 
thorized to  engage. 

There  shall  be  annually  printed,  in  at  least  one  newspa- 
per in  the  county  where  the  principal  office  of  the  company 
is  located,  or  if  an  agency  is  established  in  any  other  coun- 
ty, as  the  corporation  may  have  the  right  to  do,  then  also 
in  a  newspaper  printed  in  said  county,  a  general  balance 
sheet,  showing  the  amount  of  capital  stock  paid  in  or  secured 
by  notes  of  stockholders  for  stock  subscribed  by  them ;  the 
amount  of  premiums  and  interest  received  on  investments 
during  the  year ;  amount  of  expenses  and  losses ;  the  bal- 
ance due ;  the  nature  of  the  securities  in  which  said  balance 
is  invested ;  the  amount  of  cash  on  hand ;  and  also  a  full  ac- 
count of  existing  policies  and  the  nature  of  risks  therein 
insured  against;  and  said  balance  sheet  or  statement  shall 


— 140 — 

be  sworn  to  by  the  President  and  Secretary  of  said  com- 
pany. 

When  policies  of  insurance  are  effected  by  any  person 
on  his  life,  for  the  benefit  of  his  wife,  or  for  the  benefit  of 
any  one  or  more  of  his  children,  or  for  the  joint  benefit 
of  his  wife  and  children,  the  creditors  of  the  person  thus  in- 
suring shall  have  no  claim  on  the  proceeds  of  the  policy, 
and  the  same  shall  inure  to  the  persons  for  whose  benefit 
the  insurance  was  effected.  Creditors  shall  have  an  insura- 
ble interest  in  the  lives  of  their  debtors. 

Moneys  received  as  premiums  upon  risks  undetermined 
and  outstanding  at  the  time  of  declaring  any  dividend,  shall 
not  be  considered  as  profits,  earned  and  divided  as  such ; 
and  if  any  loss  should  happen,  impairing  the  capital  stock, 
no  dividend  shall  be  declared  until  said  capital  stock  is 
made  good ;  and  if  a  dividend  shall  be  declared,  contrary 
to  this  prohibition,  the  directors  consenting  thereto  shall 
be  liable  to  make  good  to  the  creditors  of  the  company,  if 
their  claims  cannot  otherwise  be  satisfied,  the  amounts  of 
dividends  thus  illegally  divided. 

The  said  company  may  have  the  right  to  establish  of- 
fices in  any  other  county  of  the  State  for  the  transaction  of 
business  allowed  by  the  charter. 

The  insurance  business  of  the  company  may,  at  the  op- 
tion of  the  company,  be  conducted  upon  the  principle  of  giv- 
ing to  policyholders  an  interest  in  the  profits ;  and  the  com- 
pany may  purchase  for  its  own  benefit,  an}^  policy  of  insur- 
ance or  other  obligation  growing  out  of  its  busin,ess,  and 
also  any  claims  of  policyholders  for  profits. 

Any  company  organized  under  the  provisions  of  this 
Act,  may  restrict  its  business  to  the  insurance  of  the  lives 
of  its  members  or  stockholders  alone ;  it  being  the  intent 
by  this  paragraph  to  give  a  corporate  existence  to  any  pro- 
fessional association,  guild,  brotherhood  or  other  mutual 
association,  the  right,  by  an  arrangement  among  themselves, 
as  stockholders  in  a  corporation,  to  insure  the  lives  of  each 
other  upon  the  principle  of  a  mutual  participation  in  the 


—141— 

profits,  by  annual  subscriptions  or  otherwise,  and  thereby 
provide  a  fund  out  of  which  provision  may  be  made  ac- 
cording to  the  by-laws  of  the  corporation  for  the  support  of 
the  family  of  any  stockholder  on  his  decease,  or  for  the 
payment  of  any  policy  due  his  estate  on  his  decease.  In  case 
any  company  organized  under  this  charter  restricts  its  busi- 
ness to  the  insurance  of  the  lives  of  stockholders,  no  publi- 
cation need  be  annually  made  of  its  debt  and  liabilities. 

Sec.  26.  Be  it  further  enacted,  That  any  five  or  more 
persons,  over  the  age  of  twenty-one,  desiring  to  form  cor- 
porations for  any  of  the  foregoing  purposes,  shall  copy  the 
form  of  charter  aforesaid  adapted  to  the  purpose,  filling  the 
necessary  blanks,  and  append  to  the  same  an  application  in 
these  words :  "We,  the  undersigned,  apply  to  the  State  of 
Tennessee,  by  virtue  of  the  laws  of  the  land,  for  a  charter  of 
incorporation,  for  the  purposes  and  with  the  powers  de- 
clared in  the  foregoing  instrument.  Witness  our  hands, 
the  day  of ,  19 — ."  (To  be  signed  by  the  appli- 
cants). 

The  said  instrument,  when  probated  as  hereinbefore  en- 
acted, with  application,  probates,  etc.,  is  to  be  registered  in 
the  county  where  the  principal  office  of  the  company  is  sit- 
uated, and  also  registered  as  aforesaid  in  the  office  of  the 
Secretary  of  State,  as  required  for  corporations  for  pur- 
poses not  for  individual  profit,  and  a  certificate  of  registra- 
tion given  by  the  Secretary  of  State,  under  the  Great  Seal 
of  the  State,  being  given  as  aforesaid,  shall,  when  regis- 
tered in  the  Register's  office  of  said  county,  with  the  fac 
simile  of  said  seal  as  aforesaid,  complete  the  formation  of 
the  company  as  a  body  politic ;  and  the  validity  of  the  same 
in  any  legal  proceeding  shall  not  be  collaterally  questioned. 

If  the  corporation  establishes  agencies  in  any  other  coun- 
ty or  counties,  the  instrument  must  also  be  registered  in 
said  county. 

Passed  March  19,  1875. 

Approved  March  23,  1875. 


— 142- 


FORM  OF  CHARTER  OF  MUTUAL  MA- 
RINE INSURANCE  COMPANIES. 


CHAPTER  126,  ACTS  OF  1881. 

AN  ACT  to  amend  Section  7  of  an  Act  passed  March  19,  1875,  en- 
■  titled  "An  Act  to  provide  for  the  organization  of  corporations, 
and  also  to  amend  said  Act  so  as  to  provide  for  the  organization 
of  mutual  marine  insurance  companies,"  and  to  amend  Section  5 
of  said  Act  so  as  to  provide  for  the  organization  of  stock  yard 
and  packing  companies. 

si:  *  :Js  ^:  *>;<********  * 

Sec.  6.  Be  it  further  enacted,  That  mutual  marine  in- 
surance companies  may  hereafter  be  organized  in  this  State 
under  the  provisions  of  this  Act,  and  charters  may  be  grant- 
ed for  such  corporations  by  the  corporators  complying  with 
the  provisions  thereof  in  the  same  way  that  charters  are  now 
granted  under  Section  26  of  Chapter  142  of  the  Acts  of 

1875- 

Sec.  7.  Be  it  further  enacted,  That  the  form  of  the 
charter  for  a  mutual  marine  insurance  company  shall  be  as 
follows : 

"State  of  Tennessee — Charter  of  Incorporation. 

"Be  it  known  that  (here  insert  the  names  of  five  or  more 
persons  not  under  twenty-one  years  of  age)  are  hereby 
constituted  a  body  politic  and  corporate  under  the  name  of 
(here  insert  name).  The  general  powers  of  the  corporation 
are  to  sue  and  be  sued  by  the  corporate  name,  to  use  a 
common  seal,  which  it  may  alter  at  pleasure ;  if  no  common 
seal,  then  the  signature  of  the  corporation  by  any  duly 
authorized  officer  shall  be  legal  and  binding;  to  purchase 
and  hold  or  receive  by  gift,  in  addition  to  the  general  prop- 
erty owned  by  said  corporation,  any  real  estate  necessary 
for  the  transaction  of  the  corporate  business,  and  also  to 
purchase  or  accept  any  real  estate  in  payment  of  any  debt 
due  to  said  corporation ;  or  to  take  and  hold  mortgages  upon 


—143— 

real  estate  to  secure  debts  due;  to  invest  surplus  funds  in 
interest  bearing  securities  or  notes;  to  make  all  rules  and 
regulations  not  inconsistent  with  the  laws  and  constitution 
deemed  expedient  for  the  management  of  the  corporate  af- 
fairs ;  to  establish  by-laws  and  to  appoint  such  subordinate 
officers  and  agents  in  addition  to  the  President  and  Secre- 
tary and  Trustees  as  the  business  of  the  corporation  may 
require;  designate  the  names  of  the  officers  and  fix  their 
compensation. 

Sec.  8.  Be  it  further  enacted,  That  said  corporation, 
chartered  as  aforesaid,  shall  have  power  to  make  insurance 
on  freights,  goods,  wares,  merchandise,  specie,  bullion,  jew- 
els, commissions,  bank  notes,  bills  of  exchange  in  transit, 
bottomry,  respondentia,  marine  risks,  and  risks  of  trans- 
portation of  every  character  whatever,  which  risks  said  cor- 
poration shall  have  power  to  reinsure. 

Sec.  9.  Be  it  further  enacted,  That  said  corporation 
shall  take  notes  from  subscribers  to  a  guaranty  fund,  and 
shall  have  power  to  make  calls  for  payment  of  cash  upon 
those  notes  until  fully  paid. 

Sec.  10.  Be  it  further  enacted.  That  no  charter  for  a 
mutual  marine  insurance  company  shall  be  granted  and 
issued  under  this  Act  until  not  less  than  ten  or  more  per- 
sons shall  have  made,  signed,  and  delivered  their  written 
obligations  subscribing  at  least  $100,000  as  a  guaranty 
fund  to  pay  any  and  all  risks  of  insurance  made  by  said 
company,  and  a  certified  copy  thereof  is  filed  in  the  office 
of  the  Secretary  of  State  with  the  application  for  charter. 
Each  subscriber  to  said  guaranty  fund  shall  be  liable  to 
the  full  amount  of  the  subscription  thereto  by  him  or  them 
made,  and  at  the  suit  of  any  creditor  of  said  corporation, 
but  only  after  the  refusal  of  the  corporation  to  pay ;  the 
guaranty  fund  in  no  event  shall  be  less  than  $100,000,  but 
may  exceed  that  amount.  No  dividend  shall  be  declared 
upon  the  guaranty  fund  exceeding  ten  per  cent,  per  annum. 

Sec.  II.  Be  it  further  enacted,  That  parties  insuring  in 
such  corporations  as   are  organized  under  this  Act,   shall 


—144— 

be  entitled  to  participate  in  the  profits  thereof,  and  receive 
certificates  for  the  amounts  of  such  profits,  which  shall  be 
transferable  alone  upon  the  books  of  the  company,  and  shall 
so  state  upon  their  face,  and  such  certificates  shall  be  charge- 
able for  future  losses  to  the  amount  thereof,  and  may  bear 
interest  at  six  per  cent,  per  annum. 

Sec.  12.  Be  it  further  enacted,  That  until  the  profits  of 
such  company  reach  $100,000  no  certificate  shall  be  re- 
deemed, but  certificates  may  be  redeemed  out  of  the  excess 
of  profits  over  that  sum,  commencing  by  redeeming  them  in 
the  order  issued. 

Sec.  13.     Be  it  further  enacted,  That  the  certificate  may 

be  in  the  following  form :  is  entitled  to  $ ,  to 

be  redeemed  when  the  profits  of  this  company  exceed  $100,- 
000,  and  then  only  in  the  order  of  its  issuance,  transfera- 
ble alone  on  the  books  of  this  company. 

Sec.  14.  Be  it  further  enacted,  That  the  following  pro- 
visions and  restrictions  are  coupled  with  the  grant  of  pow- 
ers to  mutual  marine  insurance  companies :  A  failure  to 
elect  officers  at  the  proper  time  does  not  dissolve  the  cor- 
poration, but  those  in  office  hold  until  their  successors  are 
elected  and  qualified.  The  term  of  all  officers  may  be  fixed 
by  by-laws,  but  not  to  exceed  two  years.  Certificates  of 
membership  may  be  issued,  based  upon  subscriptions  to 
guaranty  fund,  and  certificates  of  profits  or  return  pre- 
miums ;  fix  amount  of  guaranty  fund,  but  at  not  less  than 
$100,000;  provide  a  contingent  fund;  provide  how  and  when 
payments  shall  be  made  by  the  subscribers  to  the  guaranty 
fund ;  upon  failure  to  pay  the  amount  subscribed  as  and 
when  called,  to  institute  and  maintain  suit  therefor.  The 
Board  of  Trustees  shall  consist  of  not  less  than  ten  persons, 
to  be  elected  by  the  subscribers  to  the  guaranty  fund  and 
holders  of  certificates  of  profits  for  each  sum  of  $50 ;  the 
subscriber  or  holder  shall  be  entitled  to  one  vote.  An  an- 
nual statement  of  the  condition  of  the  company  shall  be 
made  showing  all  disbursements  and  receipts,  the  correct- 
ness of  which  shall  be  attested  by  the  Secretary,  and  the 


—145— 

books  shall  show  all  transactions  of  the  company  and  the 
proceedings  of  the  trustees ;  they  shall  at  all  times  be  open 
to  holders  of  certificates  of  profit  or  return  premiums.  No 
subscriber  to  the  guaranty  fund  shall  be  released  from  lia- 
bility to  the  full  amount  of  his  or  their  subscription,  except 
by  payments  on  account  thereof.  By  no  implication  or  con- 
struction shall  any  mutual  marine  insurance  corporation,  or* 
ganized  under  this  Act,  be  deemed  to  possess  any  powers 
except  those  hereby  expressly  given,  or  necessarily  implied 
from  the  nature  of  the  business  for  which  this  charter  is 
granted;  and  by  no  inference  whatever  shall  said  corpora- 
tion possess  the  power  to  deal  in  gold  or  silver  coin,  issue 
any  evidence  of  debts  as  currency,  buy  and  sell  any  agri^ 
cultural  products,  deal  in  merchandise,  or  engage  in  an}/ 
business  outside  the  purpose  of  this  charter,  or  engage  in 
the  business  of  banking.  The  charter  of  mutual  marine 
insurance  companies  may  be  repealed  or  amended,  and  in 
case  of  fundamental  amendments,  if  not  accepted  by  the 
subscribers  to  the  guaranty  fund  and  holders  of  certifi^ 
cates  of  profit  or  return  premiums,  then  said  company  may 
be  wound  up,  or  the  interest  of  those  dissenting  from  such 
amendments  purchased  by  those  who  accept  them,  or  are 
willing  to  do  so;  Provided,  the  guaranty  fund  is  always 
kept  at  $100,000. 

Sec.  15.     Be  it  further  enacted,  That  this  Act  take  efifect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  4,  1881. 
Approved  April  6,  1881. 


10 


— 146 — 

FORM  OF  CHARTER  OF  MUTUAL  MA- 
RINE INSURANCE   COMPANIES. 

(Amendatory.) 


CHAPTER  254,  ACTS  OF  1883. 

AN  ACT  to  amend  Sections  7,  9,  10,  11  and  14  of  an  Act  entitled 
"An  Act  to  amend  Section  7  of  an  Act  passed  March  19,  1875, 
entitled  an  Act  to  provide  for  the  organization  of  corporations," 
and  also  to  amend  said  Act  so  as  to  provide  for  the  organization 
of  Mutual  Marine  Insurance  Companies,  and  to  amend  Section 
5  of  said  Act  so  as  to  provide  for  the  organization  of  stock  j-ards 
and  packing  companies. 

Section  i.  Be  it  enacted  by  the  General  Assemblx  of 
the  State  of  Tennessee,  That  Sections  7,  9,  10,  11  and  14 
of  the  Act  entitled  as  in  the  caption  hereof,  being  Sec- 
tions 7,  9,  10,  II  and  14  of  Chapter  126  of  Acts  of  1881, 
approved  April  6,  1881,  be  so  amended  as  to  permit  anj' 
of  the  persons  who  have  signed  and  deHvered  their  writ- 
ten obligations  to  the  guaranty  fund  of  the  corporation 
authorized  by  said  Act,  to  retire  and  be  relieved  from 
their  said  obligation;  Provided,  that  before  any  such  per- 
son or  persons  shall  be  relieved  and  discharged  from  said 
guaranty,  and  other  person  or  persons  shall  enter  into  an 
obligation  similar  to  the  original  obligation,  said  substi- 
tuted guarantor  or  guarantors  shall  be  in  every  way  ac- 
ceptable to  the  Board  of  Trustees  of  the  company  of  which 
he  or  they  may  offer  to  become  guarantor  or  guarantors, 
and  the  consent  of  said  Board  to  the  substitution  be  ob- 
tained. 

Sec.  2.  Be  it  further  enacted.  That  when  any  person  or 
persons  shall  be  thus  substituted  as  guarantors,  and  the 
consent  of  said  Board  obtained  thereto,  said  obligation  of 
guaranty  shall  be  acknowledged  before  the  Clerk  of  the 
County  Court  of  the  county  in  which  the  company  is  lo- 
cated, and  the  same,  together  with  the  action  of  the  Board 


—147— 

of  Trustees,  shall  be  registered  in  the  office  of  the  Register 
of  said  county. 

Sec.  3.  Be  it  further  enacted,  That  when  said  obliga- 
tion of  guaranty  shall  have  been  thus  acknowledged  and 
registered,  the  guarantor  or  guarantors  desiring  to  retire 
and  be  relieved,  shall  be  relieved  from  all  liability  upon  the 
guaranty  accruing  subsequent  to  the  acknowledgment  and 
registry  of  said  substituted  obligation,  and  the  substituted 
guarantor  or  guarantors  shall  be  and  become  liable  for  all 
subsequent  losses  and  damages,  and  entitled  to  all  the  bene- 
fits of  said  Act  in  as  full  a  manner  as  though  he  or  they 
had  originally  signed  the  obligation  of  guaranty. 

Sec.  4.  Be  it  further  enacted,  That  the  discharge  of 
one  or  more  of  the  guarantors,  under  the  provisions  of  this 
Act,  shall  in  nowise  impair  the  liability  of  the  remaining 
guarantors,  but  all  such  guarantors  shall  be  and  remain 
liable  upon  this  obligation  in  as  full  manner  as  though  no 
substitution  had  been  made. 

Sec.  5.  Be  it  further  enacted,  That  at  any  time  any 
substituted  guarantor  may  be  relieved  and  another  guar- 
antor substituted  in  his  stead,  upon  such  steps  being  taken 
as  are  required  by  this  Act  in  cases  of  first  substitution,  and 
no  substitution  shall  impair  the  obligations  of  the  remain- 
ing guarantors. 

Sec.  6.  Be  it  further  enacted.  That  at  any  time  any 
guarantor  shall  have  the  right  to  redeem  the  amount  of 
his  guaranty  by  substituting  another  person  or  persons 
who  are  willing  to  assume  a  portion  of  his  obligation ;  Pro- 
vided, said  proposed  guarantor  or  guarantors  shall  be  ac- 
ceptable to  the  Board  of  Trustees,  and  its  consent  ob- 
tained thereto,  which  substituted  guaranty  shall  be  ac- 
knowledged, and  it  and  the  consent  thereon  registered  as 
required  in  Section  3  of  this  Act,  and  said  redemption  and 
substitution  shall  in  nowise  impair  the  obligation  of  the 
other  guarantors. 

Sec.  7.  Be  it  further  enacted.  That  should  any  guar- 
antor die,  then  the  Board  of  Trustees  shall  have  the  power 


—148— 

to  substitute  another  guarantor  or  guarantors  in  the  room 
of  such  deceased  guarantor,  which  substituted  guarantor 
shall  sign  and  acknowledge  the  proper  obligation  of  guar- 
anty, which,  together  with  the  action  of  said  Board,  shall 
be  registered  as  provided  in  Section  3  of  this  Act,  and  the 
estate  of  the  deceased  guarantor  shall  thereafter  cease  to 
be  liable  for  the  subsequent  losses  and  damages,  and  shall 
not  thereafter  be  entitled  to  any  further  benefits  of  said  Act, 
and  such  substitution  shall  in  no  wise  impair  the  obligation 
of  the  other  guarantors. 

Sec.  8.  Be  it  further  enacted,  That  before  this  Act  shall 
apply  to  any  corporation  already  organized  under  the  Act 
which  this  is  intended  to  amend,  the  Board  of  Trustees 
of  such  corporation  shall  adopt  it  as  a  part  of  their  charter, 
w^hich  Act  shall  be  signed  and  acknowledged  by  the  Trus- 
tees, and  registered  as  now  required  in  cases  of  amendment 
of  charter. 

Sec.  9.  Be  it  further  enacted.  That  should  any  company, 
already  organized  under  the  Act  which  this  is  intended  to 
amend,  have  a  guaranty  fund  exceeding  one  hundred  thou- 
sand dollars,  said  company  may  by  vote  of  its  Board  of 
Trustees  redeem  its  guaranty  fund  and  allow  any  guarantor 
or  guarantors  to  retire  therefrom  and  be  released  from  their 
guaranty,  or  allow  any  guarantor  or  guarantors  to  redeem 
the  amount  of  his  or  their  guaranty;  Povided,  That  the 
guaranty  fund  of  said  company  shall  at  no  time  be  less 
than  said  sum  of  one  hundred  thousand  dollars,  and  such 
retirement  and  release  of  reduction,  by  said  guarantor  or 
guarantors,  shall  in  nowise  eflfect  the  liability  of  the  re- 
maining guarantors,  but  they  shall  remain  liable  as  fully 
as  though  no  such  action  had  been  had. 

Sec.  10.  Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 

Passed  March  30,  1883. 

Approved  March  30,  1883. 


—149— 


INSURANCE   COMPANIES  MAY  RE- 
DUCE  CAPITAL  STOCK. 


CHAPTER  41,  ACTS  OF  1877. 

AN  ACT  authorizing  insurance  companies  to  reduce  their  capital 
stock ;  and  to  amend  an  Act  passed  March  19,  1875,  entitled  "An 
Act  to  provide  for  the  organization  of  corporations." 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  any  insurance  company,  chartered 
under  either  a  general  or  special  law  of  this  State,  be,  and 
the  same  is  hereby,  authorized  to  reduce  the  amount  of  its 
capital  stock,  by  a  vote  of  its  stockholders  owning  a  major- 
ity of  such  stock;  and  when  such  reduction  is  so  ordered 
by  such  stockholders,  the  Board  of  Directors  shall  amend 
the  charter  of  such  company  in  the  manner  provided  in 
Section  19  of  the  Act  of  March  19,  1875,  mentioned  in  the 
caption  of  this  Act ;  Provided,  That  any  company  availing 
itself  of  the  power  herein  conferred,  shall  have  and  retain  a 
surplus  fund  over  the  amount  to  which  the  capital  stock 
shall  be  reduced,  sufficient  safely  to  reinsure  all  of  its  out- 
standing risks,  and  to  protect  the  rights  of  all  existing  cred- 
itors. 

Sec.  2.  Be  it  further  enacted,  That  this  act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  the 
same. 

Passed  March  20,  1877. 

Approved  March  22,  1877. 


— 150- 


FILING  CHARTERS  OF  FOREIGN 
CORPORATIONS. 


CHAPTER  8i,  ACTS  OF  1895. 

AN  ACT  to  amend  Sections  2,  3  and  4  of  an  Act  passed  March  21, 
1891,  being  Chapter  122  of  said  Acts,  and  providing  for  the  au- 
thentication of  copies  of  charters  to  be  filed  with  the  Secretary 
of  State,  etc. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of  the 
State  of  Tennessee,  That  Section  2  of  an  Act  passed  March 
21,  1 89 1,  being  Chapter  122  of  said  Acts,  be  so  amended  as 
to  read  as  follows :  That  each  and  every  corporation  created 
or  organized  under,  or  by  virtue  of,  any  government  other 
than  that  of  the  State,  for  any  purpose  whatever,  desiring 
to  own  property,  or  carry  on  business  in  this  State  of  any 
kind  or  character,  shall  first  file  in  the  office  of  the  Secretary 
of  State,  a  copy  of  its  charter.  It  shall-  be  sufficient  to  au- 
thenticate such  copies  so  filed  by  the  certificate  of  the 
secretary  or  secretaries  of  such  corporations,  and  by  attach- 
ing thereto  the  corporate  seal. 

=i-  *  *  *  :|:  :r:  *  *  *  *  *  *  *  *  * 

Passed  April  27,  1895. 
Approved  April  30,  1895. 


—151— 

PRIVILEGE  TAX  ON  CAPITAL  STOCK 

OF  FOREIGN  CORPORATIONS  FOR 

FILING  CHARTERS  IN  OFFICE 

OF  SECRETARY  OF  STATE. 


CHAPTER  239,  ACTS  OF  1903. 

AN  ACT  to  amend  "An  Act  to  impose  taxes  upon  corporations,  as- 
sociations and  joint  stock  companies  chartered  or  incorporated 
under  the  laws  of  any  other  State  or  country  for  the  privilege  of 
coming  into  this  State  for  the  purpose  of  doing  business  here, 
and  to  provide  for  the  collection  of  the  same  and  the  payment 
thereof  into  the  State  Treasury,"  said  Act  being  Chapter  431  of 
the  Acts  of  1899. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  the  coming  into  this  State  of 
any  corporation,  association,  or  joint  stock  company,  char- 
tered or  incorporated  under  the  laws  of  any  other  State  or 
country,  for  the  purpose  of  doing  business  here,  is  hereby 
declared  and  made  a  privilege. 

Sec.  2.  Be  it  further  enacted,  That  this  section  [Section 
2,  Chapter  431,  Acts  of  1889]  is  amended  to  read  as  follows: 
That  every  corporation,  association,  or  joint  stock  company 
chartered  or  incorporated  under  the  laws  of  any  State  or 
country,  and  having  a  capital  stock,  shall  pay  into  the  office 
of  the  Secretary  of  State,  for  use  of  the  State,  upon  filing  a 
copy  of  its  charter,  as  required  by  Chapter  31  of  the  Acts 
of  1877,  and  Chapter  122  of  the  Acts  of  1891,  a  tax  upon 
its  capital  stock  as  follows — to  wit : 

Companies  of  $100,000  and  less.  $50. 
Companies  over  $100,000  and  not  more  than  $250,000, 
$100. 

Companies  over  $250,000  and  not  more  than  $500,000, 

$150. 

Companies  over  $500,000  and  not  more  than  $1,000,000, 

$200. 


—  152— 

Companies  over  $1,000,000  and  upward,  $250;  Provided, 
That  any  company  chartered  under  the  laws  of  another 
State  desires  to  locate  its  principal  office  and  do  all  of  its 
business  in  and  from  Tennessee  and  have  all  or  its  main 
property  holdings  in  Tennessee,  it  shall  then  pay  a  privilege 
tax  of  one-tenth  of  one  per  centum  on  the  authorized  cap- 
ital stock  just  as  domestic  corporations  are  now  required 
to  do;  and  Provided,  also,  That  insurance  companies  shall 
be  credited  by  the  amount  of  fees  paid  to  the  Insurance 
Commissioner  upon  entering  the  State  to  do  business. 

Sec.  3.  Be  it  further  enacted,  That  it  shall  be  the  duty 
of  the  Secretary  of  State  to  report  and  pay  to  the  State 
Treasurer,  quarterly,  all  taxes  collected  under  this  Act. 

Sec.  4.     Be  it  further  enacted,  That  this  Act  take  effect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  14,  1903.' 
Approved  April  15,  1903. 


■153— 


FEES  FOR  FILING   CHARTERS  IN 

OFFICE  OF  SECRETARY 

OF   STATE. 


Chapters  2  and  209,  Acts  of  1899,  require  insurance 
companies,  incorporated  under  the  laws  of  other  States  or 
governments,  to  pay  the  following  fees  in  addition  to  priv- 
ilege taxes  on  capital  stock : 

For  filing  each  charter  of  a  foreign  corporation $20  00 

For  filing  amendment  to  charter  of  a  foreign  corpora- 
tion        10  00 

For  filing  articles  of  consolidation  of  foreign  corpora- 
tions       25  00 


—154- 


ANNUAL     REPORTS    TO    SECRETARY 
OF  STATE. 


CHAPTER  434,  ACTS  OF   1907. 

AN  ACT  to  require  corporations  to  file  certain  information  with  the 
Secretary  of  State,  and  to  provide  for  the  payment  of  an  annual 
fee  therewith  to  the  Secretary  of  State. 

Section  i.  Be  it  enacted  by  the  General  Assembly  of 
the  State  of  Tennessee,  That  each  and  every  corporation 
heretofore  or  hereafter  chartered  by  the  State  of  Tennessee 
or  organized  under  the  laws,  and  each  and  every  foreign 
corporation  quaHfied  to  do  and  transact  its  business  in  the 
State  of  Tennessee  in  cotnpHance  with  its  laws,  requiring 
foreign  corporations  to  file  its  charter  with  the  Secretary 
of  State,  shall  on  or  before  the  first  day  of  July  in  each 
and  every  year,  commencing  with  the  year  1907,  prepare 
and  file  in  the  office  of  the  Secretary  of  State  a  written 
statement  signed  by  its  president  or  vice-president,  and 
attested  by  its  secretary  and  sworn  to  by  either  its  secretary 
or  president,  which  shall  contain  the  following  informa- 
tion— to  wit :  The  name  and  style  of  the  corporation  and 
its  principal  office  or  place  of  business  in  the  State  of  Ten- 
nessee, if  it  be  a  Tennessee  corporation ;  and  if  it  be  a 
foreign  corporation  its  principal  office  and  place  of  business 
in  the  State  of  its  creation  and  also  in  the  State  of  Tennes- 
see; the  amount  of  its  capital  stock  authorized  by  its  char- 
ter, and  the  amount  of  capital  stock  issued  and  outstand- 
ing; the  names  of  its  principal  officers — viz.,  its  president, 
vice-president  or  vice-presidents,  secretary  and  treasurer, 
and  a  complete  list  of  its  board  of  directors ;  the  nature  and 
character  of  the  business  in  which  it  is  engaged.  That 
every  such  corporation  shall,  at  the  time  of  filing  said 
statement  with  the  Secretary  of  State,  pay  to  the  said 
Secretary  of  State  a  sum  of  money  as  follows :  Every  cor- 


—155— 

poration  with  a  capital  stock  authorized  by  its  charter  of 
less  than  $100,000  and  more  than  $50,000,  $20;  every  cor- 
poration with  a  capital  stock  authorized  by  its  charter  of 
less  than  $50,000  and  more  than  $25,000,  $10;  every  cor- 
poration with  a  capital  stock  authorized  by  its  charter  of 
less  than  $25,000,  $5 ;  every  corporation  with  a  capital 
stock  authorized  by  its  charter  of  more  than  $100,000  and 
not  more  than  $250,000,  $30;  every  corporation  with  a 
capital  stock  authorized  by  its  charter  of  not  less  than 
$250,000  and  not  more  than  $500,000,  $50;  every  corpora- 
tion having  a  capital  stock  authorized  by  its  charter  of  not 
less  than  $500,000  or  more  than  $1,000,000,  $100.;  and 
every  corporation  having  a  capital  stock  authorized  by  its 
charter  of  $1,000,000  and  over,  $150. 

That  every  company  or  corporation  failing  or  refusing 
to  prepare  and  file  said  statement  and  pay  said  money,  as 
hereinbefore  provided,  shall  be  subject  to  a  penalty  of  $500, 
which  may  be  recovered  in  a  suit  brought  in  the  name  of  the 
State  of  Tennessee  against  said  company ;  and  that  the 
Secretary  of  State  shall,  on  or  before  the  first  day  of  Sep- 
tember in  each  and  every  year,  prepare  a  list  of  the  cor- 
porations in  default  and  shall  turn  over  the  same  to  the 
Attorney  General  of  the  State,  who  shall  cause  suits  to  be 
instituted  for  the  recovery  of  said  amounts  by  the  District 
Attorney  General  of  the  District  in  which  said  corporations 
in  default  have  their  principal  offices  or  places  of  business. 

Sec.  2.  Be  it  fiirtlicr  enacted,  That  this  Act  take  efifect 
from  and  after  its  passage,  the  public  welfare  requiring  it. 
Passed  April  10,  1907. 
Approved  April  13,  1907. 


-156- 


TAXES  ON    PREMIUMS. 


CHAPTER  541,  ACTS  OF  1907. 

AN  ACT  to  provide  revenue  for  the  State  of  Tennessee  and  the 
counties  and  municipalities  thereof. 


Sec.  6.  Be  it  further  enacted.  That  all  foreign  insur- 
ance companies  shall,  as  hereinafter  designated,  pay  direct 
to  the  Insurance  Commissioner  the  follow^ing  taxes,  which 
shall  be  in  lieu  of  all  other  privilege  taxes — viz. :  Fire  and 
all  other  insurance  corporations  or  companies  of  other  States 
and  foreign  countries,  except  life  insurance  corporations  or 
companies,  shall  pay  2^  per  cent  on  gross  premiums  paid 
by  or  for  policy-holders  residing  in  this  State,  or  on  prop- 
erty in  this  State,  and  life  insurance  corporations  or  compa- 
nies of  other  States  or  foreign  countries  shall  pay  2^  per 
cent  on  gross  premium  receipts  in  this  State,  payable  semi- 
annually— January  and  July — on  sworn  returns ;  and  life 
corporations  of  other  States  and  foreign  countries  ceasing  to 
transact  new  business  in  this  State  shall  continue  to  pay 
the  tax  herein  provided  on  business  in  force  and  until  the 
same  be  terminated. 

Assessment  life  and  casualty  corporations  organized 
under  the  laws  of  other  States  or  foreign  countries  shall 
pay  23^  per  cent  on  gross  premiums,  paid  by  or  for  policy 
holders  residing  in  this  State  or  on  property  in  this  State, 
payable  semi-annually — January  and  July — direct  to  the  In- 
surance Commissioner,  on  sworn  returns,  showing  gross 
premiums  paid  by  or  for  policy  holders  residing  in  this 
State  or  on  property  in  this  State  for  each  six  months,  end- 
ing on  December  31  and  on  June  30  of  each  year;  and  as- 
sessment life  corporations  ceasing  to  transact  new  business 
in  this  State  shall  continue  to  pay  the  tax  herein  provided  on 
business  in  force  and  until  the  same  be  terminated ;  Pro- 


—157— 

z'ided,  hozi'cver,  That  this  shall  not  apply  to  purely  fraternal 
orders  or  societies. 

Each  insurance  agent  or  solicitor,  except  those  repre- 
senting domestic  mutual  insurance  companies,  including 
each  member  of  an  agency  or  firm  or  corporation  writing 
or  soliciting  insurance  in  this  State,  shall  pay  an  annual 
State  tax,  in  lieu  of  all  other  privilege  taxes,  on  the  follow- 
ing basis :  Agents  engaged  in  business  or  commencing  busi- 
ness between  January  i  and  April  i  of  each  year,  $io; 
agents  commencing  business  between  April  i  and  July  i 
of  each  year,  $7.50;  agents  commencing  business  between 
July  I  and  October  i  of  each  year,  $5 ;  agents  commencing 
business  after  October  i,  $2.50. 

All  payments  to  be  made  to  the  end  of  each  calendar 
year;  this  tax  to  be  paid  direct  to  the  Insurance  Commis- 
sioner, except  when  he  delegates  the  power  to  collect  the 
same  to  the  Comptroller. 

Passed  April  15,  1907. 

Approved  April  15,  1907. 


-158- 


REQUIREMENTS  FOR  ADMISSION    OF 
ASSESSMENT  LIFE   AND  ACCI- 
DENT INSURANCE 
COMPANIES. 


The  law  requires  foreign  assessment  life  and  accident 
insurance  companies  to  file  with  the  Insurance  Commis- 
sioner the  following  documents  and  pay  to  him  the  follow- 
ing fees  and  taxes  before  they  can  be  licensed  to  do  business 
in  Tennessee : 

I.  Two  certified  copies  of  charter  or  articles  of  incor- 
poration, one  of  which  is  to  be  retained  in  the  Insurance 
Department  and  the  other  filed  in  the  ofiice  of  the  Secretary 
of  State. 

2.  Statement  showing  financial  condition  of  corporation 
as  of  date  December  31  preceding  date  of  application, 
which  must  be  sworn  to  by  two  executive  officers. 

3.  Power  of  attorney  properly  executed  on  Department's 
blank  form,  authorizing  the  Insurance  Commissioner  to  ac- 
cept service  of  process  for  the  corporation  in  all  actions  at 
law  and  in  equity. 

4.  Certificate  of  compliance  from  the  supervising  official 
of  the  corporation's  home  State,  stating  that  it  is  licensed 
in  said  State  to  transact  the  kind  or  class  of  business  which 
it  seeks  to  do  in  this  State. 

5.  Certified  copy  of  constitution  and  by-laws,  table  of 
rates  and  samples  of  all  advertising  literature. 

6.  Blank  application  for  insurance  and  specimen  copy  of 
each  form  of  certificate  issued,  properly  filled  out,  which 
certificate  must  show  that  the  insured's  liability  to  contrib- 
ute to  the  payment  of  benefits  is  not  limited  to  the  payment 
of  a  fixed  sum. 

7.     Sworn  statement  by  two  executive  officers  that  it  is 


—159— 

paying,  and  for  the  twelve  months  just  preceding  has  paid, 
in  full  the  maximum  amounts  named  in  its  policies  or  cer- 
tificates. 

8.  Certificate  from  the  supervising  official  of  the  cor- 
poration's home  State  that  corporations  of  this  State  doing 
business  under  the  laws  of  this  State  regulating  life  and  ac- 
cident business  on  the  assessment  plan  are  legally  entitled 
to  do  business  in  such  State. 

9.  Sworn  statement  by  two  executive  officers  that  the 
corporation  has  not  less  than  $1,000,000  of  insurance  in 
force,  and  that  it  maintains  assets  in  excess  of  all  liabilities 
other  than  capital  stock,  equal  in  amount  to  two  per  cent 
of  all  insurance  said  corporation  has  in  force. 

10.  Fee  for  filing  preliminary  papers  and  issuing  original 
license,  $25.  Fee  for  filing  copy  of  charter  in  the  office  of 
the  Secretary  of  State,  $20.  Privilege  tax  on  capital  stock 
graduated  as  follows : 

Authorized  capital  stock  of  $100,000  or  lesss $  20  00 

Over  $100,000  and  not  more  than  $250.000 70  00 

Over  $250,000  and  not  more  than  $500,000 120  00 

Over  $500,000  and  not  more  than  $1,000,000 170  00 

Over  $1,000,000 220  00 

NOTE — After  receiving  license  the  corporation  is  re- 
quired to  obtain  from  the  Insurance  Commissioner  a  cer- 
tificate of  authority  for  each  agent  in  the  State,  including 
each  member  of  an  agency  or  firm,  the  .  fee  for  issuing 
which  is  $2.00. 

The  State  levies  a  tax  of  23^  per  cent  on  gross  premiums 
received  from  business  in  the  State,  which  tax  is  in  lieu  of 
all  other  privilege  taxes,  and  is  payable  in  January  and  July 
of  each  year. 

All  licenses  of  insurance  companies  and  agents  expire 
December  31  of  each  year. 

Fee  for  filing  annual  statement  and  issuing  renewal 
license,  $15.00. 

Fee  for  issuing  renewal  certificate  of  authority  to  agents, 
$2.00. 


— 16()  - 


REQUIREMENTS   FOR  ADMISSION  OF  FRATER- 
NAL BENEFICIARY  ASSOCIATIONS. 


The  law  requires  foreigri  fraternal  beneficiary  associa- 
tions to  file  with  the  Insurance  Commissioner  the  following 
documents^  and  to  have  the  following  qualifications  in  order 
to  obtain  a  license  to  do  business  in  Tennessee : 

1.  Two  certified  copies  of  charter  or  articles  of  incor- 
poration, one  of  which  is  to  be  retained  in  the  Insurance 
Department  and  the  other  filed  in  the  office  of  the  Secretary 
of  State. 

2.  Statement  showing  financial  condition  of  association 
as  of  date  December  31  preceding  date  of  application,  which 
must  be  sworn  to  by  two  executive  officers. 

3.  Power  of  attorney  properly  executed  on  Department's 
blank  form,  authorizing  the  Insurance  Commissioner  to  ac- 
cept service  of  process  for  the  corporation  in  all  actions  at 
law  and  in  equity. 

4.  Certificate  of  compliance  from  the  supervising  official 
of  the  association's  home  State,  stating  that  it  is  licensed  in 
said  State  to  do  business  as  a  fraternal  beneficiary  associa- 
tion. 

5.  Certified  copy  of  constitution  and  by-laws,  table  of 
rates,  and  samples  of  all  advertising  literature. 

6.  Blank  application  for  insurance  and  specimen  copy 
of  each  form  of  certificate  issued,  properly  fill'ed  out,  which 
certificate  must  show  a  definite  amount  to  be  paid  the  in- 
sured for  any  benefit  promised. 

7.  Sworn  statement  of  two  executive  officers  that  it  is 
paying,  and  for  the  twelve  months  just  preceding  has  paid, 
in  full  the  maximum  amount  named  in  its  policies  or  certifi- 
cates. 


— i6i— 

8.  It  must  have  a  lodge  system  and  ritualistic  form  of 
work  and  representative  form  of  government. 

9.  It  must  pay  death  benefits  and  may  pay  disability 
benefits. 

10.  Every  contract  must  provide  for  regular  payments 
or  assessments  during  its  entire  existence. 

11.  The  admission  of  members  is  limited  to  those  be- 
tween the  ages  of  16  and  60,  inclusive. 

12.  Constitution  and  by-laws  cannot  be  amended  or  al- 
tered except  by  the  supreme  legislative  or  governing  body, 
a  majority  of  whose  members  must  be  elective,  and  if  more 
than  a  majority  is  required  to  change  the  constitution  and 
by-laws,  then  such  number  must  be  elective. 

13.  The  constitution  and  by-laws  must  contain  an  as- 
sessment or  emergency  clause. 

14.  It  must  be  provided  in  the  constitution  and  by-laws 
what  proportion  of  the  dues  or  assessments  is  for  expenses, 
and  what  proportion  is  for  mortuary  or  disability  purposes, 
and  no  part  of  the  reserve,  emergency  or  surplus  funds,  or 
the  net  accretion  thereon,  can  be  used  for  expenses. 

15.    White  and  colored  persons  cannot  be  members  of 
the  same  fraternal  association. 

16.  Premiums  or  rates  must  not  be  less  than  those  re- 
quired by  the  Fraternal  Congress  mortality  table. 

17.  Paid  agents  are  prohibited. 

18.  Every  association  must  have  at  least  500  members  in 
good  standing,  $500,000  insurance  in  force  and  $2,500  above 
all  liabilities  to  the  credit  of  the  mortuary  or  disability 
fund. 

NOTE — All  licenses  expire  April  ist  of  each  year.    Fee 

for  issuing  original  or  renewal  license,  $10.00.     Fee  for 

filing  copy  of  charter  in  the  office  of  the  Secretary  of  State, 

$20.00. 
11 


1 62 — 


REQUIREMENTS  FOR  ADMISSION  OF  FIRE  AND 
CASUALTY  INSURANCE  COMPANIES. 


The  law  requires  foreign  fire  and  casualty  insurance 
companies  to  file  with  the  Insurance  Commissioner  the  fol- 
lowing documents  and  pay  to  him  the  following  fees  and 
taxes  before  they  can  be  licensed  to  do  business  in  Ten- 
nessee : 

1.  Two  certified  copies  of  charter  or  articles  of  incor- 
poration, one  of  which  is  to  be  retained  in  the  Insurance 
Department  and  the  other  filed  in  the  office  of  the  Secretary 
of  State. 

2.  Statement  showing  financial  condition  of  corporation, 
as  of  date  December  31  preceding  date  of  application, 
which  must  be  sworn  to  by  two  executive  officers. 

3.  Power  of  attorney  properly  executed  on  Department's 
blank  form,  authorizing  the  Insurance  Commissioner  to 
accept  service  of  process  for  the  corporation  in  all  actions 
at  law  and  in  equity. 

4.  Certificate  of  compliance  from  the  supervising  official 
of  the  corporation's  home  State,  stating  that  it  is  licensed 
in  said  State  to  transact  the  kind  or  class  of  business  which 
it  seeks  to  do  in  this  State. 

5.  If  the  corporation  is  organized  under  the  laws  of  any 
foreign  country,  it  is  required  to  deposit  in  the  United 
States  $200,000  with  some  State  official  and  file  said  State 
official's  certificate  of  deposit. 

6.  A  sworn  statement  that  the  corporation  has  a  paid-up 
capital  stock  of  not  less  than  $100,000,  of  which  amount  at 
least  $75,000  is  invested  in  solvent  securities,  to  be  certi- 
fied as  such  by  the  Insurance  Commissioner  of  the  corpora- 
tion's home  State,  reckoning  the  said  securities  at  their  cur- 
rent market  value. 


— 163— 

7.  Fee  for  filing  preliminary  papers  and  issuing  original 
license,  $30.  Fee  for  filing  copy  of  charter  in  the  office  of 
the  Secretary  of  State,  $20.  Privilege  tax  on  capital  stock 
graduated  as  follows : 

Authorized  capital  stock  of  $100,000  or  less $  20  00 

Over  $100,000  and  not  more  than  $250,000 70  00 

Over  $250,000  and  not  more  than  $500,000 120  oa 

Over  $500,000  and  not  more  than  $1,000,000 170  00 

Over  $1 ,000,000 220  00 

NOTE — After  receiving  license  the  corporation  is  re- 
quired, to  obtain  from  the  Insurance  Commissioner  a  cer- 
tificate of  authority  for  each  agent  in  the  State,  including 
each  member  of  an  agency  or  firm,  the  fee  for  issuing 
which  is  $2.00. 

The  State  levies  a  tax  of  2^  per  cent  on  gross  premiums 
received  from  business  in  the  State,  which  tax  is  in  lieu  of 
all  other  privilege  taxes,  and  is  payable  in  January  and  July 
of  each  year. 

All  licenses  of  insurance  companies  and  agents  expire 
December  31  of  each  year. 

Fee  for  filing  annual  statement  and  issuing  renewal 
license,  $15.00. 

Fee  for  issuing  renewal  certificate  of  authority  to  agents, 
$2.00. 


— 164 — 


REQUIREMENTS    FOR    ADMISSION    OF    LEGAL 
RESERVE  LIFE  INSURANCE  COMPANIES. 


The  law  requires  foreign  legal  reserve  life  insurance 
companies  to  file  with  the  Insurance  Commissioner  the  fol- 
lowing documents,  and  pay  to  him  the  following  fees  and 
taxes  before  they  can  be  licensed  to  do  business  in  Ten- 
nessee : 

I.  Two  certified  copies  of  charter  or  articles  of  incor- 
poration, one  of  which  is  to  be  retained  in  the  Insurance 
Department  and  the  other  filed  in  the  ofifice  of  the  Secretary 
of  State. 

2.  Statement  showing  financial  condition  of  corporation, 
as  of  date  December  31  preceding  date  of  application, 
which  must  be  sworn  to  by  two  executive  officers. 

3.  Power  of  attorney  properly  executed  on  Department's 
blank  form,  authorizing  the  Insurance  Commissioner  to  ac- 
cept service  of  process  for  the  corporation  in  all  actions  at 
law  and  in  equity. 

4.  Certificate  of  compliance  from  the  supervising  offi- 
cial of  the  corporation's  home  State,  stating  that  it  is 
licensed  in  said  State  to  transact  the  kind  or  class  of  busi- 
ness which  it  seeks  to  do  in  this  State. 

5.  Certificate  of  deposit  from  the  official  with  whom  the 
deposit  is  made,  that  the  corporation  has  securities  to  the 
actual  cash  value  of  at  least  $100,000  deposited  with  him 
for  the  protection  of  all  policy  holders. 

6.  Specimen  copies  of  all  policies  properly  filled  out,  to- 
gether with  table  of  rates. 

7.  Fee  for  filing  preliminary  papers  and  issuing  original 
license,  $30.  Fee  for  filing  copy  of  charter  in  the  office  of 
the  Secretary  of  State,  $20.  Privilege  tax  on  capital  stock 
graduated  as  follows : 


-i65- 

Authorized  capital  stock  of  $100,000  or  less $  20  00 

Over  $100,000  and  not  more  than  $250,000 70  00 

Over  $250,000  and  not  more  than  $500,000 120  00 

Over  $500,000  and  not  more  than  $1,000,000 170  00 

Over  $1,000,000 220  00 

NOTE — After  receiving  license  the  corporation  is  re- 
quired to  obtain  from  the  Insurance  Commissioner  a  cer- 
tificate of  authority  for  each  agent  in  the  State,  including 
each  member  of  an  agency  or  firm,  the  fee  for  issuing 
which  is  $2.00.  • 

The  State  levies  a  tax  of  25^  per  cent  on  gross  premiums 
received  from  business  in  the  State,  which  tax  is  in  lieu  of 
all  other  privilege  taxes,  and  is  payable  in  January  and  July 
pf  each  year. 

All  licenses  of  insurance  companies  and  agents  expire 
December  31  of  each  year. 

Fee  for  filing  annual  statement  and  issuing  renewal 
license,  $25.00. 

Fee  for  issuing  renewal  certificate  of  authority  to  agents, 
$2.00. 


— 166— 


TO  ACTS  AND  AMENDMENTS  INSERTED  THEREIN. 


Chap. 


Acts 


Affents  of  insurance  companies,  status  of 

Anti-compact  law 

Assessment  life  and  accident  insurance 

Applications  for  11,000,000  of  insurance 

Assets  in  excess  of  liabilities 

Deposit  of  SIOO.OOO 

Industrial  companies  exempt 

Apportionment  and  accounting  of  surplus 

Board  contracts  prohibited 

Casualty  insurance  companies,  regrulation  of 

Capital  stock  of  domestic  companies  reduced 

Capital  stock  of  foreign  companies  not  taxable 

Charters  must  be  filed  in  office  of  Secretary  of  State 

Corporations  and  stock  companies  cannot  act  as  agents. 
Charter  forms  and  provisions  of  domestic  companies 


Charter  forms  of  domestic  mutual  marine  companies 

Disability  insurance 

County  mutual  fire  insurance  companies 

Co-insurance  clause 

Delinquent  agents'  privilege  taxes,  how  collected 

Disbursements,  regulated 

Fraternal  act 

Pees  for  filing  annual  report  with  Secretary  of  State... 


Pees  for  filing  charters  in  office  of  Secretary  of  State. 


Fire  marshal  law 

Fire  insurance  stock  companies,  regulation  of.. 

Foreign  mutual  fire  insurance  companies 

General  insurance  act. 

Bureau  of  insurance 

Capital  stock,  amount  required 


442 

479 

127 

574 

574 

450 

164 

454 

456 

160 

41 

21 

81 

444 

142 

j    126 

1    254 

224 

463 

539 

21 

439 

480 

434 

]    '[ 

I    209  I 


1907 
1905 
1897 
1903 
1903 
1907 
1901 
1907 
1907 
1895 
1877 
1897 
1895 
1907 
1875 
1881 
1883 
1889 
1907 
1903 
1897 
1907 
1905 
1907 

1899 


460 

1907 

160 

1895 

462 

1907 

160 

1895 

58 

1873 

493 

1907 

-167 — 


INDEX— Continued. 


Chap. 


Acts 


Page 


Churches,  capital  stock  of,  companies  to  insure.. 

Deputy  and  his  duties 

Insurance  Commissioner,  duties  of,  etc 

Jurisdiction  of  State  courts  exclusive 

Life  insurance  included 

Loss  or  damage 

Reserve  liability  of  domestic  fire  companies 

Surplus  line  insurance 

Indorsements  on  life  policies 

Investment  of  funds  of  domestic  life  companies 

Insurance  agents  are  agents  of  the  companies 

Insurance  contract  is  the  policy 


Life  insurance  not  subject  to  claim  of  creditors.    Sec- 
tions 2294,  2478,  2479,  Code  1858 


Life  insurance  companies,  regulation  of 

Misrepresentation  of  life  insurance  policies- 
Mutual  fire  insurance  companies — 

County  mutuals 

Foreign  mutuals,  admission  of 

State  mutuals 

Penalty  act  for  delay  in  payment  of  losses.... 


Political  purposes,  funds  of  insurance  companies  cannot 
be  used  for 


Policy  is  the  entire  contract 

Privilege  tax  on  capital  stock  of  foreign  companies  for 
filing  charter  in  office  of  Secretary  of  State 


Publication  of  unclaimed  dividends.    Sec.  1830,  Code  1858 

Regulation  of  all  companies  on  legal  reserve  basis 

Regulation  of  salaries,  etc.,  of  insurance  companies.. 

Reports,  annual,  to  Secretary  of  State 

Resident  agents'  law 

Requirements  for  admission  of— 

Assessment  life  and  accident  companies 

Fraternal  associations 

Fire  and  casualty  companies 

Legal  reserve  life  insurance  companies 


131 

459 

58 

253 

423 

31 

37 

492 

392 

458 

442 

441 

160 
455 

463 
462 
461 
141 

443 
441 

239 

160 
440 

430 


1901 

1907 

1873 

1907 

1903 

1899 

1897 

1907 

1905 

1907 

1907. 

1907 

1895 
1907 

1907 
1907 
1907 
1901 

1907 
1907 


1895 
1907 
1907 
1899 


13 

6 

7 
13 

6 

5 
II 
23 
128 
60 
63 
64 

130 
5 
53 

69 
84 
76 
126 

57 
64 

151 

129 

5 

55 
154 
123 

158 
160 
162 

164 


— 168- 


INDEX— Continued. 


Chap. 

Acts 

440 

1907 

461 

1907 

457 

1907 

456 

1907 

454 

1907 

j  175 

1895 

1  360 

1905 

541 

1907 

442 

1903 

539 

1903 

107 

1893 

Page 


Salaries  and  compensation  of  officers  and  ag:ent8.. 

State  mutual  fire  insurance  companies 

Standard  provisions  and  conditions  of  life  policies 

Special  board  contracts 

Surplus  apportionment  and  accounting 

Surety  bonds,  official 

Taxes  on  premiums 

Taxes  on  premiums  payable,  how  long 

Three-fourths  value  clause 

Valued  policy  law 


55 

76 

41 

51 

47 

110 

115 

156 

134 

118 

117 


329277 


7: 


UNIVERSITY  OF  CAUFORNIA  LIBRARY 


